Chapter 11 - Managing Ethically and Sustainably

Y1 - Organisation theory Managing and Organizations samenvattingen Stewart R. Clegg, Tyrone S. Pitsis, Matthew Mount

Corporate social responsibility (CSR)

• When organisations exceeds the minimum legal obligations to stakeholders specified through regulation and corporate governance.

• CSR is a voluntary commitment to sustainable economic development on the part of an organisation, intended to improve the quality of life of its employees, families, local communities and society.

CSR at 3 levels

1. Institutional level → legitimation of organisational actions in so far as they accord with institutionalised norms and values. General societal expectations and framing and implementation of these in practice

2. Organisational level → organisations need to take responsibility for their actions otherwise they can be held legally accountable for their actions and non-actions

3. Individual level → morality and ethics of individual managers in their relationships with stakeholders

Neo-classical economists (Friedman)

Argue that business owes abstractions such as society nothing. They believe that they don't owe it to anyone to follow any CSR projects and consider it irrelevant especially if it's a profit business.

Stakeholders

Stakeholders are persons with an interest in the activity of the organization.

Shareholders/Stockholders

Shareholders are the owners of a firm.

Stakeholder Relevance

Investments in an organisation make stakeholders susceptible to risk from the organisation's activities. Relevant stakeholders are affected by time-related considerations

Eg. In the short-term businesses will pay the most attention to stakeholders whose impact is more immediate on their day-to-day operations.

Eg. investors and stock market analysts.

Thinking paradoxically

Introducing products focused on sustainable innovation, even if they aren't immediately profitable (like hybrid cars), can help build market share on a more sustainable foundation in the long run.

E.g Tesla

Corporatism - social partner

A cconcept embraced in certain European countries like Austria and Germany model wherein the government, major employers, and employee interest groups collaborate in a cooperative and socially responsible manner, fostering a consensus-based approach to governance and economic policies.

CSR focuses on

1. Tripple bottom line - Profits, People ad Planet

2. Good corporate governance and enhanced transparency

3. Stakeholder management as a key task of managing divergent interests

4. Philanthropy and support of societal groups for less privileged members of society (E.g charity work)

Stakeholder theory

A form of the implicit social contract between distinct and identifiable stakeholders and the organization in question.

stakeholders & non-humans

Animals and plants are also stakeholders. In CSR we sometimes give ethical responsibilities to organisations relating to animals, making them a stakeholder. We must consider the moral feelings of animals. Animal ethics is most seen in the food or pharmaceutical industries. Unnecessary suffering in animals etc.

Corporate greening (new corporate environmentalism)

Involves adopting green principles and practices in as many facets of the business as it is possible to do. Espousal of ‘green’ values, which are becoming increasingly institutionalised with the realisation that sustainable production is equivalent to more efficient production. An increase since the 2017 global warming conference. Green production that uses less energy, green materials that recycle and aim for 0 waste, green transportation, green facilities and educating others about how to be green.

factors characterise a successful green learning organization:

1. Lifelong learning → making sure an organisation is really a learning organisation, using both single and double-loop learning.

2. Developing critical thinking skills → giving employees confidence in critical reflection on how things are being done now and encouraging them on new ideas on how to make it better

3. Building citizenship capabilities → employees are not just employees, they are citizens that want to do something better for the Earth.

4. Fostering environmental literacy → encouraging others to learn about environmental problems, causes, consequences & solutions

5. Nurturing ecological wisdom → understanding of the web of life, learning how to be responsible, ethical and sustainable and how to behave that way

Building green learning

1. Creation of a public sphere → organisations can become actively involved in educating their members in green debates as real people instead of just employees

2. Development of communicative rationality →commitment to frank and open debate, assessing and evaluating evidence for ethical decisions

3. Discursive design

The nine planetary boundaries

1. Climate change

2. Land system change

3. Freshwater use

4. Biogeochemical flows

5. Ocean acidification

6. Atmosphere

7. Biosphere integrity

8. Novel entities

9. Stratospheric ozone depletion

Global Resource Dividend

Businesses would pay a tax on any services or resources they use or sell. More harmful resources = more tax

Green washing

a form of advertising or marketing spin in which green PR and green marketing are deceptively used to persuade the public that an organization's products, aims and policies are environmentally friendly

Circular Economy

Focuses on use and waste. “take-make-dispose” economy is bad so we should be more circular and recycle our products more.

Steady State economy

Argues that economic growth has limits in ecology, demography etc. The state of mind is “If the growth of a company comes at the cost of species, habitat, ecology, sustainability etc, what is the point?”

Degrowth economics

Argues that developed nations will have to dematerialise and detune their current economics and lifestyles as they are already in overshoot

Normative ethics

The rules and/or cultural norms that governments should govern organisational conduct. 78% of the top 1000 US companies have a code of conduct. Business related to the rules and/or cultures that govern or should govern, organisational conduct.

Corporate code of ethics

Document that details normative guidelines or ethical rules for employees and (sometimes) for suppliers. It gives strong ethical support, promotes empowerment etc.

Corperations with contradicting ethics

• E.g McDonalds → Ethically dubious proposition … But they contribute to epidemic of child obesity

• E.g Nike → sustainable materials… But they outsource making their clothes with 14-year-old children that are mega underpaid

Ethics pays / strategic philanthropy

Companies tend to only be philanthropic to become more competitive against their competitors, not for the sake of being good.

Ethics for politics

Companies have a code of ethics for political reasons. If someone at the company does something bad, you can claim that they didn't follow the ethical code therefore, politically you (the company) didn't do anything wrong and it's fully the fault of the individual as he signed the code.

Ethics Values

Universal expectations and morality. We should all be honest, respectful, kind etc.

Whistleblower

a person who informs on a person or organization regarded as engaging in an unlawful or immoral activity. (snitch)

Empowering ethics

Supporting moral learning and development, following your own moral compass. However can lead to whistleblowing

Restricted Ethics

Strict code of conduct

Bureaucracy ethics

Guardian of ethics, they are policymakers. They don't care about status, religion, or ethnicity.

Incompatability of profits and principles

If profits are paramount, ethics will suffer, that is, if ethics potentially compromise profits. Ethics are often opposed to rationality. An organization's ethical commitment is driven by self-interest.

E.g if a company wants to maximise its profits, it will pay minimum wages and the cheapest raw materials.

Code of Conduct

A set of rules that organisations adopt in order to ensure ethical behaviour