Business Ethics //Social Responsibility /

Environmental Sustainability
Business
Ethics
 Business Ethics

It is a form of applied
Principles of conduct ethics or professional
ethics that examines
within organizations
ethical principles and
that guide decision moral or ethical problems
making and behaviour. that can arise in a
business environment
 GOOD
is
ETHICS
GOOD
BUSINESS
 Code of Ethics

a document that provides behavioral

guidelines that cover daily activities
and decisions within the organization.
 Ethics Culture
TO ALIGN ETHICAL AND STRATEGIC DECISION MAKING
• incorporate ethical considerations into long-term planning
• incorporate ethical considerations into performance
appraisals
• encourage whistleblowing

• monitor department and corporate performance regarding

ethical issues
 The Role of Business Ethics:
Considering Ethics

•Robert A. Cooke, a noted ethicist, suggests that the following questions

be used to assess the ethical viability of a proposed action:
• Is the action arbitrary or capricious? Does the action unfairly single out an
individual or group?
• Does the action affect the morals, or legal rights of any individual or group?
• Does the action conform to accepted moral standards?
• Are there alternative courses of action that are less likely to cause actual or
potential harm?

© 2012 Pearson Prentice Hall. All rights reserved. 1-8

Most common unethical acts
Whistleblowing

refers to policies that require employees to

report any unethical violations they discover or
see in the firm
 Bribery

defined as the offering, giving, receiving, or

soliciting of any item of value to influence
actions of an official or other person in
discharge of a public or legal duty
Disclosure and Confidentiality
Insider Dealing
Love Affairs at Work
Company policies/sactions to
unethical acts
 Social
Responsibilit
y
SOCIAL
RESPONSIBILITY

Actions an organization takes beyond

what is legally required to protect or
enhance the well-being of living things.
SOCIAL POLICY

Concerns what responsibilities the firm

has to its employees, consumers,
environmentalists, minorities,
communities, shareholders, and other
groups.
SOCIAL
POLICIES ON
RETIREMENT
The retirement ages today are not
based on biological grounds, but flow
from Social Security retirement ages.
Different CSR activities of
companies
• Give example companies and the CSR or social policies (within) they
practices
Environmental
Sustainability
 H O U R G L A S S

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

C R E A T I V E V E N U S
 Environmental Sustainability
H O U R G L A S S

• 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.

C R E A T I V E V E N U S
 Environmental Sustainability
H O U R G L A S S

1. Dassault Systemes France Software 86.1%

2. Neste Finland Oil, Gas & Consumable 85.2%
Fuels
3. Valeo France Auto Components 83.6%
4. Ucb Belgium Pharmaceuticals 79.5%
The World’s 5. Outotec Finland Construction & Engineering 78.3%

Most 6. Amundi France Capital Markets 77.8%

7. Cisco Systems U.S. Communications Equipment 77.0%
Sustainable
8. Autodesk U.S. Software 76.9%
Companies 9. Siemens Germany Industrial Conglomerates 76.7%

10. Samsung SDI S. Korea Electronics, Instruments & 75.8%

Components
11. Aareal Bank Germany Thrifts & Mortgage Finance 75.4%

12. Enbridge Canada Oil, Gas & Consumable 74.9%

Source: Corporate C R E A T I V E V E N U S Fuels
Knights
 Environmental Sustainability
H O U R G L A S S

13. Merck U.S. Pharmaceuticals 74.3%

14. Natura Cosmeticos Brazil Personal Products 74.1%
15. Pearson UK Media 73.9%
16. Amadeus IT Group Spain IT Services 73.2%

The World’s 17. Bayerische Motoren Werke Germany

18. Companhia Energetica de Brazil
Automobiles
Electric Utilities
73.2%
73.0%
Most Minas Gerais CEMIG
19. Koninklijke Philips Netherlands Industrial 72.5%
Sustainable 20. Allergan U.S.
Conglomerates
Pharmaceuticals 72.2%
Companies 21. Honda Motor Co Japan Automobiles 71.9%

(Forbes, 2018) 22. Sanofi SA

23. McCormick
France
U.S.
Pharmaceuticals
Food Products
71.9%
71.5%
24. Commonwealth Bank of Australia Banks 71.5%
Australia
25. Vivendi France Media 71.1%
C R E A T I V E V E N U S
Environmental Sustainability
H O U R G L A S S

C R E A T I V E V E N U S
 H O U R G L A S S

Sustainability Report
• Reveals how a firm’s operation impact
the natural environment

• These reports are not required, but

are a good business practice
C R E A T I V E V E N U S
 H O U R G L A S S

Managing Environmental Affairs of a Firm

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

C R E A T I V E V E N U S
CONSUME
R ENVIRONME
PUBLIC
DEMAND NTAL FEDERAL AND
OPINION ADVOCACY STATE
ENVIRONMENT
GROUPS
AL
REGULATIONS
WHY FIRMS SHOULD “BE GREEN”

CONSUMER LIABILITY
LENDER S, SUITS
SUPPLIERS, AND
S
DISTRIBUT FINES
ORS AND
Pencils to seedlings
 Environmental Sustainability
H O U R G L A S S

No-plastic Zero -
Policy waste
Stores

Paper and Metal

C R E A T I V E V E N U S
GOT HEART PH
H O U R G L A S S

C R E A T I V E V E N U S
RITUAL
H O U R G L A S S

C R E A T I V E V E N U S
UNILIVER
H O U R G L A S S

C R E A T I V E V E N U S
Adidas is making 11 million shoes out of recycled
ocean plastic. 
 H O U R G L A S S

International Standards Organization (ISO)

• A network of standards institutes of 147 countries,

with one member per country.
• The world’s largest developer of sustainability
standards.
• Compliance is voluntary

C R E A T I V E V E N U S
 H O U R G L A S S

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)

C R E A T I V E V E N U S
MAJOR REQUIREMENTS OF EMS UNDER ISO
H O U R G L A S S

14001
1. Show commitments to prevention of pollution, continual improvement
in overall environmental performance, and compliance with all
applicable statutory and regulatory requirements.

2. Identify all aspects of the organization’s activities, products, and

services that could have a significant impact on the environment,
including those that are not regulated.

3. Set performance objectives and targets for the management system

that link back to three policies: (a) prevention of pollution, (b) continual
improvement, and (c) compliance.
C R E A T I V E V E N U S
MAJOR REQUIREMENTS OF EMS UNDER ISO
H O U R G L A S S

14001
4. Meet environmental objectives that include training employees,
establishing work instructions and practices, and establishing the actual
metrics by which the objectives and targets will be measured.

5. Conduct an audit operation of the EMS.

6. Take corrective actions when deviations from the EMS occur.

C R E A T I V E V E N U S
Global/ International Issues
Global Issues

• Global considerations impact virtually

all strategic decisions
• A world market has emerged
• It is difficult for a firm to survive relying
solely on domestic markets

Copyright © 2011 Pearson Education, Inc.

Ch 11 -43
Publishing as Prentice Hall
Multinational Organizations

• International firms or Multinational Corporations.

Organizations that conduct business operations across national borders

Multinational Organizations
• International firms or multinational corporations face
many complex variables:
• Social
• Cultural
• Demographic
• Environmental
• Political
• Governmental
• Legal
• Technological
• Competitive opportunities and threats
Joke
• What do call someone who speaks multiple languages?
• A polyglot
• What do call someone you speaks two languages?
• Bilingual
• What do call someone speaks only one language?
• American
Advantages and Disadvantages
of International Operations
Advantages
1. Gain new customers
2. Absorb excess capacity, reduce unit costs, and spread economic
risks
3. Allow firms to establish low-cost production facilities
4. Competition may be less intense
Advantages
5. Reduced tariffs, lower taxes, and favorable political treatment
6. Joint ventures can enable firms to learn new technology, culture,
and business practices
7. Economies of scale
8. Power and prestige in domestic markets may be significantly
enhanced
Disadvantages
1. Foreign operations could be seized (nationalized)
2. Different and often little-understood social, cultural,
demographic, environmental, political,
governmental, legal, technological, economic, and
competitive forces
3. Weakness of competitors overestimated
Disadvantages
4. Different language, culture, and value systems
5. Understanding of regional organizations needed
6. Dealing with two or money systems
The Global Challenge (balance of
trade)
• How to gain and maintain exports to other nations

• How to defend domestic markets against imported goods

Changes in the Global Economy
• Corporations are obtaining customers globally
• Markets are shifting rapidly and converging in tastes, trends, and
prices
• Innovative transport systems are accelerating transfer of technology
• Nature and location of production systems are shifting
Reasons for Global Expansion
• Advancements in telecommunications
• Growth in demand for goods and services outside the U.S. is
considerably higher than inside
• 95% of the world's population lives outside the U.S.
Protectionism
• Countries imposing tariffs, taxes, and regulations on firms outside the
country to favor their own companies and people
• Free trade?  WTO
Globalization
• Globalization:
• The process of doing business worldwide
• Global strategy includes considering global needs
during
• Design
• Production
• Marketing
A Weak Economy
• Recession
• Two consecutive quarters of a decline in real gross domestic
product
• Many countries have recently experienced a recession
• Unemployment rates are high across the U.S. and around
the world
Philippines GDP Annual Growth
Rate
Philippines Unemployment Rates
Philippines
Countries Suffering from Recession
• Australia
• Belgium
• Canada
• Denmark
• Estonia
• Finland
• Hungary
Venezuela
Prices of Goods In Venezuela
ELDEN’S Part
Cultural Differences
 Cultural Differences
Beliefs Behaviors Languages

Practices Expressions

Source: MightyRecruiter (n.d.)

Cultural Differences
• Time • Values
• Space • Eating
• Family roles • Rules of etiquette
• Religious factors • Importance of
• Family time relationships
European Business Culture
• Participatory management
• Most workers are unionized
• More frequent vacations and holidays
• Guaranteed permanent employment common
• Workers often resent pay for performance, commissions, and
objective measurement and reward systems
Mexican Business Culture
• Low tolerance for adversarial relations or friction at work
• Employers are paternalistic
• Workers do not expect self-expression or initiative at work
• Businesses stress collectivism, continuity, cooperation, belongingness,
formality, and doing exactly what you are told
• Rarely entertain business associates at homes
Mexican Business Culture
• Preserving one’s honor, saving face, and looking important are valued
• Opinions expressed by employees are often regarded as back talk
• Supervisors are viewed as weak if they explain the rationale for their
orders to workers
• Mexicans often do not follow rules
• Life is slower in Mexico, tardiness is common
Japanese Business Culture
• Importance of group loyalty and consensus called “Wa”
• Constant discussion and compromise
• Silence is a plus in formal meetings
• When confronted with disturbing questions, managers often remain
silent
• Managers are reserved, quiet, distant, introspective, and other
oriented
Asian Business Culture
• First names are not generally used in business
• Extended periods of silence are important
• A sale is the beginning, not the end of a relationship
• Resting, listening, meditating, and thinking are considered productive
Philippine Business Culture
• Hiya ( “shame” or “shyness” and likened to “losing face”)
• Pakikisama
• Hierarchy is vertical and the most senior person in a company
approves all final decisions
• Dominated by family-run businesses
• Personal relationships
• Face-to-face meetings
Philippine Business Culture
• Flexible sense of time
• Meetings may have an agenda but it is not always fully respected
• Handshakes are the most common form of greeting
• Titles are very important, especially during first meetings
• Conservative dress is expected
• Business meetings usually start with some small talk, which can
involve personal matters (family, marriage, etc.)
How management style varies
globally?
How management style varies
globally?
• In a study “A Comparison of Different Management Styles Across the
Globe”, the researchers concluded that:

• “...all countries have their own perspective, views and culture of their
management styles, whether it is decision making, leadership, approach to
change, timelines and priorities.”
How management style varies
globally?
• In a study “A Comparison of Different Management Styles Across the
Globe”, the researchers concluded that:
• “As Adaptability and Leadership of different countries of world have different
views some factors like Individualism and Collectivism, Decision Making and
Timeline and Priorities are also different for different countries in the world as
to relate with management styles.”
Communication Differences
Across Cultures
• Italians, Germans, and French do not soften up executives with praise
before a criticism
• Israelis are accustomed to fast paced meetings
• British executives complain that Americans chatter too much
• Europeans feel that they are being treated like children when asked to
wear nametags
Communication Differences
Across Cultures
• Executives in India are used to interrupting each other
• In Malaysia and Japan periods of silence are appropriate, no silence is
needed in Israel
• “How was your weekend?” is considered intrusive by many business
people
World Tax Rates
• US 21% • European Union 21.3%
• Japan 30.86% • Ireland near 12.5%
• Germany 15.825% • Uzbekistan 7.5%
• UK 19% • Philippines 30%
• France 25%
How does Philippines perform in terms
of global expansion?
How does Philippines perform in
terms of global expansion?
Africa: Newest Hotspot for
Business Entry
• Africa’s population is projected to reach 2 billion
by 2050
• By 2040, Africa will likely have a larger workforce
than China or India
• Major investments in African infrastructure
development continue to create growth and drive
innovation
Africa: Newest Hotspot for
Business Entry
• Women are the economic engine of Africa, and their
impact is accelerating
• Trade and investment flows between the United
States and Africa are critical to our economies
REFERENCES:
MightyRecruiter. (n.d.). What is Cultural differences? HR Definitions & Examples. Retrieved March 29, 2019, from
https://www.mightyrecruiter.com/recruiter-guide/hiring-glossary-a-to-z/cultural-differences/
Export Entreprises SA. (n.d.). Philippines (The): Business practices. Retrieved March 30, 2019, from
https://en.portal.santandertrade.com/establish-overseas/philippines/business-practices
A Comparison of Different Management Styles Across the Globe. Retrieved from http://data.conferenceworld.in/SUSTECH/P849-855.pdf
http://francorp.com.ph/2017/01/13/8-filipino-franchises-that-have-gone-global/
US-Africa Business. (2016, September 18). Five Good Reasons for Doing Business in Africa. Retrieved April 1, 2019, from https://medium.com/u-s-
africa-business-forum-2016/five-good-reasons-for-doing-business-in-africa-91ef33c03a8e

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References
• The Manila Times (2018). Understanding Corporate Social
Responsibility. Retrieved from
https://www.manilatimes.net/understanding-corporate-social-respons
ibility/400050/https://www.manilatimes.net/understanding-corporate
-social-responsibility/400050
/, April 9, 2019.
• http://businessfeed.sunpower.com/csr/8-things-sustainable-business
es-care-about