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)
LISA YANGIBUS20002 Business in the Global EconomyManagerial implications ❏Disrupting business models❏Improved 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 use❏Engaging 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 accountability○★Innovating 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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- Business Ethics, Corporate social responsibility, LISA YANG