The Business Case

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Transcript The Business Case

International Project Week
From Oxymoron Case to Integrity Case - a Call for Moralization of Management in
the Context of International Business Ethics and Corporate Social Responsibility
Thursday, May15th 2014
Prof. Birgit Weyer, M.Sc., D.M.
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International Project Week, Helsinki
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What are the goals of today‘s lecture?

Students are able to differentiate between CSR based on the
Oxymoron Case, Business Case and Integrity Case

They can explain why moralization of management is important
01.04.2016
14.05.2014
International
Unternehmensethik
Project Week, Helsinki
2
Logic of the Oxymoron Case

Ethical behavior is costly (positive Oxymoron Case)

Economic success cannot afford to pay for the cost of ethical behavior
(negative Oxymoron Case)

Discarded based on Business Case
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International Project Week, Helsinki
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From Oxymoron Case to Business Case
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Logic of the Business Case

Not behaving ethically responsible is costly (negative Business Case)

Ethic pays off (positive Business Case)

Business ethics is a strategic success factor

Important CSR-Initiatives (e.g. EU-Greenbook) plead the Business
Case

Most important theoretical basis Stakeholder-Theory (Freeman,1984)

Ethical businesses are rewarded, unethical are punished through
stakeholders (moralization of markets)
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The Moral Market
Ethical Stakeholders
• Media -> Investigative
Journalism
• NGOs -> loss of image
• Customer -> buycott
• Employees -> brain
drain, mental absence
• Investors -> Deinvestment
• Government -> New
regulations
Unethical
Companies
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Theorie of the Business Case
Ethically sensible and active
stakeholders
Reward and punishment effect
(Ethical rules of the game)
Pre-economic and economic
consequences (ethics as a
success factor)
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International Project Week, Helsinki
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Critical Issues in the Business Case

Stakeholder can evaluate the ethical behavior of businesses only in very
view cases

Greenwashing or „Ethical Storytelling“

Influential stakeholder don‘t care about ethical behavior of businesses > missing motivation to punish businesses

Business Case works in democratic societies
Conclusion:
Businesses can be successful based on their ethical behavior ,
they don‘t have to be!
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International Project Week, Helsinki
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The Business Case

Simple Aufklärungsarbeit

Double Reassurance
- Ethic is a „comforting slogan“
- Ethic doesn‘t interfere with business as usual
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International Project Week, Helsinki
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From Moralizing the Market to Moralizing
Management

Moralizing the market (Business Case) shows through
- ethically oriented stakeholder groups (e.g. employees, customer)
= wirtschaftsbürgerliche integrity of the individual
- business owner feels responsibility for success (Ethics without moral)

Moralization of management (Integrity Case) shows through
- Decisions which consider the consequences
- „Earn money in a good way“ rathern than „earn good money“
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International Project Week, Helsinki
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Moralization of Management
Responsibilities
Financial
Societal
Decisions
Pre-economic Consequences
Practical socio-economic
consequences
„Good“ behavior
Earning „good“ money
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Earning money in a „good“ way
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Legitimizing Profits

Make financial success dependent on social, ecological and economic
legitimy

Be able to justify your behavior toward one-self and others and evaluate
it as „good“

Limiting financial business success to „enough“ ROI

Clear definition of what is not wanted (customers, contracts, suppliers)
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Define Your Personal Values
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
Self-reflection relating to values
and purpose in life

Leading others requires knowing
yourself
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Value Management in Practice
① Codify
- Is – Analysis of implizit rules and assumptions
- Should description based on company goals
- Evaluate value- and goal conflicts as well as risks for the organization
- Define potential successes and evaluate against risks
- Kodify behavioral values in "Code of Ethics“
- Mind the “value quadrant“ meaning values in relation to ethics,
cooperation, performance and communication
This codifcation is the explication of moral knowledge in a business.
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Value Management in Practice
② Communicate
- Management of values requires constant feedback!
- Include major stakeholders in the definition of values
- An open, participate internal and external communication strategy is
the basis for success of value management
-Mistakes in communication will result in resistance
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Only 1/3 of Employees is Aware of
Company Values
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Value Management in Practice
③ Implementation
- Experiencing and internalizing of codified moral knowledge, the
implicit moral knowledge of the business and it‘s employees
- Transfer of values into leadership instruments e.g. choice of strategic
partners, CSR initiatives, employee performance management
- Values as KPIs in goal setting
- Recruiting should choose future employees based on their willingness
to live by the company values
- Underscores the seriousness in implementing value management
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Value Management in Practice
④ Organize
- In training programs company values and value based behavior are
discussed
- Conflicts in relation to goals are presented for dialog
- Values are the background for every decision
- Instruments are seminars and workshops, as well as communication
and public relations materials
- Continuous evaluation of implementation and, if necessary,
adjustment of values
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