This document is from a chapter on business ethics, social responsibility, and environmental sustainability. It discusses key topics related to establishing principles of ethical conduct in organizations, developing codes of business ethics, and training employees on ethics. It also addresses the importance of social responsibility and protecting the environment, including strategies for firms to become more sustainable and issues like global warming. The chapter presents ideas for integrating ethics and social considerations into strategic planning and decision making.

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Ch 10 -1
Chapter 10
Business Ethics/ Social Responsibility/
Environmental Sustainability
Strategic Management:
Concepts & Cases
13th Edition
Fred David

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Ch 10 -2

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Ch 10 -3
Business Ethics
Social Responsibility
Environmental Sustainability

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Ch 10 -4
Business Ethics
 Principles of conduct within
organizations that guide decision
making and behavior

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Ch 10 -5
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 -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

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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

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Ch 10 -8
Bribes
 A gift bestowed to influence a recipient’s
conduct
 Illegal in many countries, acceptable in others

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Ch 10 -9
Business Ethics
Social Responsibility
Environmental Sustainability

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Ch 10 -10
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 -11
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 -12
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 -13
Business Ethics
Social Responsibility
Environmental Sustainability

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Ch 10 -14
Environmental Sustainability
 The extent that an organization’s
operations and actions protect, mend,
and preserve rather than harm or
destroy the natural environment

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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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Sustainability Report
 Reveals how a firm’s operation impact
the natural environment
 These reports are not required, but are
a good business practice

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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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Obama Regulations
 New “clean technology” business
start ups
 Solar
 Wind
 Biofuels
 Insulation

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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 -20
Students and Environmental Training
 Companies prefer to hire graduates
with training in environmental
issues

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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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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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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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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 -25
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 -26
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 -27
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