Normativism belief that ethical behavioural standards are universal and firms

Normativism belief that ethical behavioural standards

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Normativism( = belief that ethical behavioural standards are universal and firms must seek to uphold them around the world) UN Global Compact encourages companies tofollow normative approachand maintain superior ethical standards (i.e. all four responsibilities in the CSR pyramid) ⇒ Many governments require home country laws and standards to be observed abroad(e.g. US’ FCPA)
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LISA YANGIBUS20002 Business in the Global EconomyManagerial implications Disrupting business modelsImproved pay, working conditions,employee rights, transparency and disclosure (e.g. Foxconn, UBS, Credit-Suisse) ⇒ subject to more scrutiny Driving efficiency in value creation Energy efficiency and waste management programs (e.g. Dow Chemicals and GM) ⇒ water andenergy useEngaging in CSR-focussed product and service innovation Developing eco-products and services(e.g. GE’s ‘eco-imagination’ business strategy, Nike’s ‘Considered Design’ concept, Natura Brasil’s partnership agreements with rural communitiesto provide ingredients and knowledge for its cosmetics) Frugal innovation in poorer countries, exported to richer countries (e.g. GE’s electrocardiogram and Tata Chemical’s Swach and Nano)The growing importance of sustainability New and increasing government regulations European Commission’s April, 2016 proposal on MNE’spublic disclosure on earnings and taxes paid India’s 2014 rulingthat big companies need to spend 2% net profit for society’s benefit US’EPA clean power planthat limits carbon emissions from coal plants Increasing social expectations Popular tide against corporate greed, widespread use of the Internet and social media and the rise of the electric/millennial generation placing expectations for greater corporate accountabilityInnovating for competitive positioning both: Internally,to achieve operational cost savings and efficiencies across value chain Externally, to identify new needs and markets to create shared value Growing emphasis on corporate governance and culture of accountability Develop global CSR standards and objectivesthat are communicated and implemented across the firmworldwide. Redefine role of the board as representing the interests of all stakeholders, not just shareholders Critical to gain legitimacy among stakeholders Reward executives in terms ofLT financial performance measures(e.g. based on materiality) Incentivise a culture of voluntary giving, diversity and management by principle
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