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
Business Ethics
Social Responsibility
Environmental Sustainability

3. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -3
Business Ethics
 Principles of conduct within
organizations that guide decision
making and behavior

4. Copyright © 2011 Pearson Education, Inc.
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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

5. Copyright © 2011 Pearson Education, Inc.
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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

6. Copyright © 2011 Pearson Education, Inc.
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Ch 10 -6
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

7. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -7
Bribes
 A gift bestowed to influence a recipient’s
conduct
 Illegal in many countries, acceptable in
others

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.
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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

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.
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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.
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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.
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Ch 10 -15
Lack of Standards Changing
 Making a claim that a product or
process is “green” is becoming more
difficult as standards are put into place

16. Copyright © 2011 Pearson Education, Inc.
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Ch 10 -16
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

17. Copyright © 2011 Pearson Education, Inc.
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Ch 10 -17
Students and Environmental Training
 Companies prefer to hire graduates
with training in environmental
issues

18. Copyright © 2011 Pearson Education, Inc.
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Ch 10 -18
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

19. Copyright © 2011 Pearson Education, Inc.
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Ch 10 -19
Be Proactive, Not Reactive
 Proactive – do more than the bare
minimum
 Reactive – changing only when
forced to by the law or consumer
pressure

20. Copyright © 2011 Pearson Education, Inc.
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Ch 10 -20
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

21. Copyright © 2011 Pearson Education, Inc.
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Ch 10 -21
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)

22. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -22
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

23. Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -23
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