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A business approach that creates long-term value for the organisation by incorporating
economic, environmental and social dimensions into its core business decisions
The key to a business successfully demonstrating its commitment to CSR is ultimately through its actions. A
business can do this by:
Stakeholders: are key individuals or groups of individuals with vested interest or stakes in a given decision or
project.
Direct Stakeholder is a customer, supplier, government body, or anyone else formally linked to the
organisation(s).
Indirect Stakeholder is a member of the community who is not directly involved in the organisation(s) but
is affected by its behaviour; such as a resident in its immediate community.
The growing interest in CSR demonstrates that stakeholders expect more from organisations than just financially
successful performance.
Ecological sustainability refers to the development and use of methods of production that allow resources to be
used by producers today without limiting the ability of future generations to satisfy their needs and wants.
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Annie Tran BIS13
Organisational Sustainability is concerned with:
Business Ethics
Ethics can be defined as what is good or right for human beings.
The basic concerns of ethics are:
Ethical behaviour involves making decisions that are not only legally correct but also, in a sense, morally correct.
Business ethics are the rules and principles a business follow to be a good corporate citizen.
Business ethics is the application of moral standards to business behaviour such as:
o Fair and honest business practices
o Decent workplace relations
o Conflict of interest situations
o Accurate financial management
o Truthful communication.
Broadly speaking there are two different schools of thought in the business ethics community. For some business
ethics is conceived of as a normative ethics.
Normative Ethics seeks to establish means of judging whether business practices are right or wrong.
o Can assist managers in dealing with moral dilemmas or to enable past actions to be judged in terms
of their ethicality.
o Business ethics used normative models in order to investigate the ethical nature and consequences
of particular events or practices in the business.
o Managing ethics is done through formalised codes of conduct that should govern everyday actions
and decisions.
The study of business ethics has also been pursued through a descriptive approach because it uses scientific
analysis to describe the actual behaviour of organisations and their members.
Why be ethical?
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Annie Tran BIS13
Ethics: many facets, levels of focus
Individual
o Individual choices, professional ethics; what kind of person/leader am I?
Organisation
o Organisational actions, decisions, strategies; culture, corporate social responsibility
Macro/systemic
o Economic, political, legal & social systems in which business operate; environmental, social, political
consequences of business activity.
Consider this
Should a company be responsible for people who are exposed to their dangerous products, but who did not
actually buy the products from the company?
Examples:
o People injured in a car accident because of a fault in a car that they were passengers in?
o People who get lung cancer from cigarette smoking but who have never smoked (passing smoking)
o People who buy homes in 2010 but were built with asbestos products in the 1950s
DUTIES / MORAL RIGHTS Does a decision or behaviour maintain the fundamental rights of human beings?
UTILITARIANISM Does a decision or behaviour do the greatest good for most people?
Seeks the greatest good (benefit) for the greatest number of people.
The best course of action has the best outcome for most.
Can apply to either individual acts or general rules.
Though, question is how to define good ?
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Annie Tran BIS13
Consequence-based framework
Utilitarianism: the end goal can justify the means to get there.
Ethical Egoism: seeking self-interest only
Consequentialist frameworks are typical in business settings.
Right to freedom from discrimination Duty to obey lawful instructions and commands:
Right to due process the instructions must be lawful (not illegal) and
Right to healthy and safe working conditions should not put the employee in position of harm or
Right to fair wages risk.
Right to work Duty to work with skill.
Right to privacy Duty to disclose relevant information: medical
Right to collective bargaining & association
information etc.
Right to participation
Duty to respect the employers property
Right to freedom of conscience and speech
Global Perspective
Geocentrism: world oriented view focusing on the best approaches and people from around the world.
E.g. McDonalds.
Parochialism: viewing the world solely through your own eyes and perspective.
Ethnocentrism: best work approaches and practices come from the home country.
Polycentrism: managers in the host country know the best work approaches and practices. (The best global perspective)
Is when an organization spends more time + money advertising that they are "green" or
environmentally-friendly than putting into place, practices that are environmentally-friendly.
Some organizations may do this simply as a matter of public relations.
ALSO, it can be the practice of misleading customers about the environmental benefits of a
specific product through misleading advertising and unsubstantiated claims.
E.g. a company changing the name of their harsh detergent product from Product X to
Product Green, yet the product is still the exact same harsh detergent.
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How different is it from doing business locally? Is it more complex?
Crossing Borders
o State Borders
o Cultural Borders
o Economic Borders (Types of Economic systems market vs command, EU, ASEAN, NAFTA)
o Borders of Mind and Habit
Note:
The organisations environment (both internal and external) influences decision making in organisations
The external environment influences the boundaries of what an organisation can do, as well as providing
opportunities and threats to their current processes
The internal environment provides the unwritten rules about how things are done and what is acceptable
and unacceptable behaviour
Managing in a global environment adds a new dimension (and a level of complexity) for the modern
manager
International Business impacts both Multinational Corporations (MNCs) and local businesses