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.
14.05.2014
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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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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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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