FUNDAMENTALS Session 2 Session 2 Ethics and CSR Chapter 5 - - PowerPoint PPT Presentation

MANAGEMENT FUNDAMENTALS

Session 2

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Session 2

 Ethics and CSR – Chapter 5  Business Environment – Chapter 3

Ethics and Social Responsibility

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Chapter 05

Definition - Ethics

Ethics are ‘codes of moral principles and values’ that govern the behaviour

• f a person or group (organization) with

respect to what is right or wrong

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Three Domains to Control Human Action

Page 136 Exhibit 5.1

Human behaviour is controlled by three domains

What benefits does an

• rganization gain by acting

ethically?

Benefits of ethical behaviour

 Enhance Public Image

The World’s Most Ethical Companies in 2019

Volvo Cars is named by the Ethisphere Institute as the ‘World’s Most Ethical Company, 2019’. This company is receiving this honor for three consecutive years now, which is a great achievement for a commercial organization. This year, 128 companies were shortlisted from all over the world, for awarding this title. But among them, only 4 companies have been finally selected for this recognition in the Automotive category, Volvo Cars being one of them

Ethics are built into the culture of 3M 3M’s Code of Conduct is central to its business playbook and a key reason for the company’s high reputation among consumers and across many industries. “Great and enduring companies are driven by purpose and built on a foundation

• f trust” – Mike Roman the CEO

“Customers want to do business with companies they can trust, and achieving that trust requires the help of all employees. I’m proud to say our people live 3M’s Code of Conduct every day by making ethical decisions and speaking up if they aren’t sure what to do.”

Became the world’s most ethical company for the 6th consecutive year in 2019 (BY ETHISPHERE.COM)

ASDA (owned by US company WalMart) is a retail store became notorious for its unpleasant atmosphere It had massively failed to embed corporate responsibility into its operations and supply chains around the globe. This had lead to workers' rights abuses at supplier factories, accusations

• f discrimination by staff, and a host of other charges

Build customer loyalty

Benefits of ethical behaviour

 Ability to retain good employees  Positive work environment

Sometimes managers find it difficult to make ‘ethical decisions’ This refers to the doubts arise whilst making decisions to confirm whether certain decisions are ethical or not

Ethical Dilemma

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Criteria for Ethical Decision Making

Utilitarian approach

• Decision maker considers the effect of each decision alternative on

all parties and select the one that optimizes the satisfaction for the greatest number of people – optimizing happiness of the majority

Moral-rights approach

• Human rights are considered whilst making decisions

Justice approach

• Decisions are made to ensure equity, fairness and impartiality

Individualism approach

• Acts are moral when they promote the individual’s best long-term

interests

Virtue Ethics Approach

• Moral behavior stems from personal virtues (e.g. Honesty,

Trustworthiness, Integrity, etc.) Practical approach

• Decisions are taken combining the above

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Corporate Social Responsibility

5/7/201 6 GDM 401 PB: HDM Page 146

Definition : CSR

The obligation of an organisation’s management to make choices and take actions that will contribute to the welfare and interests of society Two main considerations  Nature and Society

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Question to Discuss

 How can organizations carryout various CSR

activities? Provide examples

Examples of Corporate Social Responsibility in Action Corporate social responsibility comes in many forms. Even the smallest company impacts social change by making a simple donation to a local food bank. Some of the most common examples of CSR include:

• Reducing carbon footprints

Siemens Pledging to Reduce Carbon Impact The world’s largest industrial manufacturer has pledged to be completely carbon neutral by the year 2030. Investing

• ver €100 million into reducing their environmental impact,

Siemens aims to cut its carbon emissions in half

Examples of Corporate Social Responsibility in Action Corporate social responsibility comes in many forms. Even the smallest company impacts social change by making a simple donation to a local food bank. Some of the most common examples of CSR include:

• Reducing carbon footprints
• Improving labor policies
• Participating in fair trade

Fair Trading at BODYSHOP

The Body Shop currently works with 120 suppliers, in 26 countries around the world, who employ over 30,000 people. Through our Ethical Trade programme we are working continuously to ensure that all of these workers’ lives are enriched through engaging with The Body Shop, and their workplaces are happy, safe, fair and secure.

Examples of Corporate Social Responsibility in Action Corporate social responsibility comes in many forms. Even the smallest company impacts social change by making a simple donation to a local food bank. Some of the most common examples of CSR include:

• Reducing carbon footprints
• Improving labor policies
• Participating in fair trade
• Charitable giving

Dane Anita Roddick: the body shop

“The purpose of business should not merely be money, it should be about responsibility. It should be about public good, not private greed”

Microsoft and CSR

“Everywhere we operate, we focus on contributing to local communities in positive ways—helping to spark growth, competitiveness and economic opportunity for all” Satya Nadella, CEO of Microsoft, 2017

Examples of Corporate Social Responsibility in Action Corporate social responsibility comes in many forms. Even the smallest company impacts social change by making a simple donation to a local food bank. Some of the most common examples of CSR include:

• Reducing carbon footprints
• Improving labor policies
• Participating in fair trade
• Charitable giving
• Socially and environmentally conscious investments

Triple Bottom Line - 3P’s

Brandix

 “Care water – care for woman”  Water supplying systems – particularly in rural

areas where there are less assess to clean drinking water

 Started with 500 such projects across the country

Question to Try

“CSR initiatives enable to enhance corporate image” Discuss and justify the above statement with suitable example

C O R P O R AT E C U LT U R E A N D T H E E N V I R O N M E N T

Chapter 03

Business Environment

External Environment

[Outside the boundary

• f an organization]

Internal Environment

[Within the boundary

• f an organization]
• Business Environment refers

to the combination of both internal and external factors which influence business

• perations
• The challenge in the

business environment:

• 1. Consistently influence

business operations (e.g. Covid-19 pandemic)

• 2. Environment is getting

changed quite often (dynamism)

Who are Stakeholders?

“

“Any group or person within or

• utside organization that has

some type of investment or interest in the organization’s performance and is affected by

• rganisation actions”

e.g. Shareholders

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Classification of Stakeholders

External Environment Internal Environment

Question to Discuss - Stakeholder Satisfaction

Why it is important to keep the

following stakeholders happy?

Employees Customers

Business Environment - Levels

External Environment

[Outside the boundary

• f an organization]

Internal Environment

[Within the boundary

• f an organization]

The Internal Environment

Includes physical facilities, corporate culture, production technology and structure

Organization Culture Organizational culture refers to the set

• f key values, beliefs, understandings,

and norms shared by members of an

• rganization

Refer Page 83

Visible and Invisible aspects in Culture

Culture includes both visible and invisible aspects

Values, Beliefs & Assumptions

Refer Page 84

Types of corporate culture (CLASSIFICATION)

Refer Page 87 Less Dynamic Highly Dynamic Stable environment Unstable environment

Assumption : Business Environment can mold a corporate culture

We can recognize 4 types of corporate cultures

Types of corporate culture

• Stable environment
• Employees are

encouraged to achieve

• Expect rapid growths
• Dynamic environment
• Employees are involved

in running the business (participating)

• Decentralized decisions
• Stable environment
• Having steady rules

and regulations

• Dynamic environment
• Employees are

empowered to make decisions then and there

• ‘Learning’ atmosphere

Adaptability culture Consistent culture Achievement culture Involvement culture

Refer Page 88

Unstable Environment Stable Environment

Additional Reading

 Apply your skills – experiential exercise

(Adaptability culture)

Refer Page 95

External Business Environment

Refer Page 70

Macro (General) Micro (Task)

Internal

Framework of the External Business Environment

Components includes all elements existing outside the boundary of the

• rganization that have the

potential to affect the

• rganization

Refer Page 70

The External Environment

External Environment

Task environment

Customers Competitors Suppliers Labour suppliers

General Environment

International Political Economical Socio-cultural Technological Ecological (natural) Ethical Legal

Individuals and groups directly deal/transact with or influence the

• rganization in carrying
• ut various tasks

Invisible forces

Refer Page 70 Micro Macro

PESTEEL forces + International pressures

International Environment

 Globalization influences all other

aspects of the external environment

 New competitors  New suppliers

 The global environment is complex

and ever-changing

 Organisations must think globally

and learn how to compete globally

Refer Page 71

Technological Environment

Scientific and technological advancements which can impact on business (e.g. 5G networks, autonomous devices, AI, VR/AR, Big Data concepts, etc.)

Refer Page 71 Genetic Fortune Teller 3D Metal printing

Anki is a San Francisco-based company that wants to bring artificial intelligence and robotics into our everyday lives.

Artificial Intelligence Influence the Toys Industry

Socio-Cultural Environment

Demographic characteristics, norms, customs, and values

e.g. World Population: growing, ageing, migrations, urbanizing  Mega trends related to Population

Expect 8.8b population by 2030

Question to Discuss

 What kind of problems the world would face when

the population becomes more elderly?

Economic Environment

 Economic health of the country/region  Extended globally with uncertainty  Economic shift impacted small business

although there is still vitality in small business sector of economy

 Consumer purchasing power  Unemployment rate

Income, Inflation, GDP , Employment rates, Inflation, etc.

Legal-Political Environment

 Government involvement

 Political activities (trade barriers)  Government agencies and regulation (e.g. minimum

wages, labour rules, etc.)

 International relationships  Bi-lateral and multi-lateral

agreements

Interest rates (Monetary policy) Taxation (fiscal policy)

GVT CB

Examples of Leading Trading Agreements

Natural Environment

 Growing importance and pressure  Organisations must be sensitive to the environment  Natural dimension does not have own voice  Environmental groups advocate action/policy  Climate changes – weather conditions  Global warming  Reduce pollution  Develop renewable energy  Deforestation (43m hec of deforest)  Pandemics

• Nearly 3.3. million people die due to

air-pollution

• Nearly 3 million children (less than 5

years) die cue to environmental issues

Additional Reading

Innovative way, Page 147

Refer Page 147

Thank You The End