RESPONSIBLE MANAGEMENT Glocal Sustainability, Responsibility, and Ethics

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Principles of RESPONSIBLE MANAGEMENT Glocal Sustainability, Responsibility, and Ethics Oliver Laasch Center for Responsible Management Education (CRME) and University of Manchester Roger N.

1 Principles of RESPONSIBLE MANAGEMENT Glocal Sustainability, Responsibility, and Ethics Oliver Laasch Center for Responsible Management Education (CRME) and University of Manchester Roger N. Conaway Tecnol6gico de Monterrey ~E Principles for Responsible PR IWI Management Education A CRME publication in support of PRME ~- ~ CENGAGE - Learning Australla Brazll Japan Korea Mexlco Slngapore Spaln Unlted Kingdom Unlted States

2 BRIEF CONTENTS PART A: BASICS 1 Context: Drivers, Actors, Subjects 2 Management: Basics and Processes 1 23 PART B: DOMAINS 3 Sustainability: Managing for the Triple Bottom Line 4 Responsibility: Managing for StakeholderValue 5 Ethics: Managing for Moral Excellence PART C: PLANNING 6 Strategy: Responsible Competitiveness 7 Entrepreneurship: Value-Added Ventures PART D: ORGANIZING 8 Organization: Responsible lnfrastructure 9 Operations: Responsible Enterprise Excellence 10 Supply Chain: Responsible Supply and Demand PART E: LEADING 1 1 Human Resources: HR-RM Symbiosis 12 Marketing and Communication: Stakeholder Goodwill 13 International Business and Management: Glocally Responsible Business PART F: CONTROLLING 14 Accounting and Controlling: Stakeholder Accountability 15 Finance: Responsible Return on Investment Subject Index Name Index xiv

1 PART A: BASICS 1 PART B: DOMAINS Chapter 1: Context: Drivers,Actors, Subjects Chapter 3: Sustainability: Managing The Context of Responsible Management 2 for the Triple Bottom Line 52 Subjects and

3 1 PART A: BASICS 1 PART B: DOMAINS Chapter 1: Context: Drivers,Actors, Subjects Chapter 3: Sustainability: Managing The Context of Responsible Management 2 for the Triple Bottom Line 52 Subjects and Actors of Responsible Management 4 Business Sustainability: Managing for the Triple Bottom Line 53 Subjects and Background Disciplines 4 Sectorial Actors Origins of Business Sustainability 55 5 The Workplace of Responsible Managers 6 Roots: Indigenous Sustainability 55 The Megatrend and Its Drivers 8 Historical Beginnings of Unsustainability 56 Theoretical Advances 57 Stakeholder Wants and Needs 9 Institutionalization of Sustainability 59 New Markets and Business Case IO The Status Quo and the Future 60 Converging Global Crises IO Internet, Transparency, and Globalization II Concepts of Sustainability 61 Institutionalization of Responsible Defining Sustainability 6I Management II The Three Dimensions of Sustainability 6I Barriers, Inhibitors, and Criticisms 12 Interpreting Sustainability 63 Profit Issues Economic Development versus Sustainable 13 Economic Crises Development Greenwashing 15 Sectorial Sustainability Footprints 68 Cause Criticism I5 Managing Business Sustainability 70 Applicable for Only a "Selected Few" 15 Operational Inhibitors I 7 The Goal: A Neutra/ to Positive Triple Bottom Line 70 Chapter 2: Management: Basics and Processes 23 Process I: Impact Accounting 7I Process 2: Impact Management 75 Responsible Management 25 Management Basics and the Evolution to Prime Chapter 4: Responsibility: Managing Management 25 for Stakeholder Value 83 What Is Management and How Do We Make lt Business Responsibility: Managing For Responsible? 28 Stakeholder Value 84 Evolution of Management Thought 3I Origins of Business Responsibility 85 The Responsible Manager 35 Religious Roots of An Evolving Discipline 86 The Role of Managerial Hierarchies 35 Theoretical Advances and Institutionalization 87 Competencies for Prime Managers 37 Status Quo and the Future 88 The Responsible Management Process 39 Concepts of Business Responsibility 89 Planning 39 Defining Business Responsibility 89 Organizing 42 Related Terms 89 Leading 43 Classification and Interpretation 92 Controlling 46 Assessing Corporate Social Per{ ormance 93 XV

Responsibility Management as Stakeholder Management 97 The Goal: Stakeholder Value Optimization 97 Management Process L: Stakeholder Assessment 99 Management Process 2: Stakeholder Engagement rn 3

4 Responsibility Management as Stakeholder Management 97 The Goal: Stakeholder Value Optimization 97 Management Process L: Stakeholder Assessment 99 Management Process 2: Stakeholder Engagement rn 3 Chapter 5: Ethics: Managing for Moral Excellence 1 12 Ethical Business and Ethics Management 113 Origins of Business Ethics 114 Roots of Business Ethics n 5 The Discipline of Business Ethics L L 5 Institutionalization, Status Qua, and Future L L7 Basic Concepts of Business Ethics 118 Defining Business Ethics L L 8 Levels of Application n9 Moral Dilemmas and the Relationship to Law and Comp/iance n9 Morality and Values L20 Interpreting Business Ethics n2 Domains of Business Ethics 124 Domain L: Normative Ethics-Evaluate Right or Wrang L24 Domain 2: Descriptive Ethics-Exp/ain Right and Wrang Actions L 3L Domain 3: Ethics Management-App/y Management Tools for Right Actions L 36 Ethics Programs and Culture L44! PART C: PLANNING Chapter 6: Strategy: Responsible Competitiveness Strategy and Responsible Management The Goal: Responsible Competitiveness Phase 1: Formulating the Mission, Vision, and Strategie Objectives Phase 2: Analyzing the Strategie Environment Externa/ Environment Analysis Interna/ Environment Analysis Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis Phase 3: Crafting the Strategy Corporate Level Strategy Business Unit Level Strategy Functional Level Strategy Phase 4: Executing and Evaluating Strategy Strategy Implementation Strategy Contra/, Review, and Evaluation L L69 L7L L L7J L77 Chapter 7: Entrepreneurship: Value-Added Ventures Social Entrepreneurship and Responsible Management Goal: The Value-Added Venture Phase 1: Understanding Social Entrepreneurship and Social Innovation 189 Elementary Perspectives of Social Entrepreneurship Economic Systems Identifying the Starting Point for Social Innovation Implications for Social Entrepreneurship Money, Labor, and Land L89 L9L L93 L95 L96 Phase 2: Envision Your Pathway 198 Scenario L: From Third Seetor to Social Economy L98 Scenario 2: From Private to Social Economy 20L Scenario 3: Pram Public Service to Social Entrepreneurship PART0: ORGANIZING Chapter 8: Organization: Responsible lnfrastructure 220 Responsible Management and Organizational Theory 222 The Goal: Responsible Infrastructure Phase 1: Understanding the Organization Opposing Viewpoints The Organization and Management Theory Phase 2: Creating Structures for Responsible Business: Restructuring the Organization Organizationa/ Design Patterns Elements of Responsible Organizational Structure Phase 3: Developing the Organization Responsibly Organizational Leadership Responsible Culture Managing Change Chapter 9: Operations: Responsible Enterprise Excellence Operations and Responsible Management Goal: Responsible Enterprise Excellence Phase 1: Describe the Process Mapping the Process xvi Contents

5 Describing the Process through Procedure The Difference between HRM and Responsible Documents 267. HRM 334 Bundling Processes to Management Systems 27I The Business Case for Responsible HRM 336 Phase 2: Be Efficient through Lean Enterprise The New Skills for Responsible HRM 336 Methods 274 Responsible HRM Leadership and HRM Stakeholders 337 Lean Enterprise Methods 274 The Role of the HR Manager in Advancing Toyota Production System 277 Responsible Business 338 Phase 3: Be Effective through Quality Phase 1: Recruitment 339 Management 279 The Traditional Recruitment Process 339 Customer Orientation and Continuous Developing the Responsible Job Description 340 Improvement 280 Obtaining Candidates in a Responsible Way 340 Breakthrough lmprovement through Six Sigma The Selection Process 34I Innovation and Design 285 Hiring in the Responsible Organization 342 Benchmarking and Breakthrough Improvement 287 Phase 2: Training and Development of Employees 342 Chapter 10: Supply Chain: Responsible New Employee Orientation 344 Supply and Demand 299 A Model for Orientation and Socialization 344 Responsible Management and the Supply Chain 300 Training 346 Employee Development The Goal: Responsible Supply and Demand Employability 348 Phase 1: Understanding the Supply Chain 302 Phase 3: Performance Management 349 Sltpply Networks 302 Performance Evaluation Mapping Supply Architectures Core Competencies 350 The Role of Small and Medium-Sized Community Involvement and Environmental Enterprises (SMEs) 304 Stewardship Social Sustainability 3JI 3IO Offboarding 353 Phase 2: Managing inside the Supply Chain 311 Phase 4: Compensation, Benefits, and Employee Engagement Practices 3I2 Well-Being 354 Standardization and Certification inside the Driving Principles of a Compensation System Supply Chain 354 3I3 Living Wage Application of QM Principles in Environmental 356 Employee Well-Being Management in OM and SCM 356 3I5 Ecoefficiency and Ecoeffectiveness 3I6 Phase 5: Employee Relations and Logistics 3I6 Communications 357 Phase 3: Closing the Loop 318 Union-Busting 357 Employee Communications 358 Industrial Ecology 3I9 The Circular Economy 320 Chapter 12: Marketing and Communication: Closed-Loop Supply Chains 32I Stakeholder Goodwill 366 End-of-Life (EOL) Design 322 Further Closed-Loop Tools Marketing, Communication, and Responsible 323 Management 367 The Goal: Stakeholder Goodwill PART E: LEADING Phase 1: Ensuring Effective Integrated Marketing Communication 370 Chapter 11 : Human Resources: HR-RM Understanding Effective Communication 37I Symbiosis 330 Marketing Responsible Business Performance 377 Human Resources and Responsible Management 331 Phase 2: Applying Responsible Management The Goal: HR-RM Symbiosis 332 Marketing and Communication Tools 381 Phase 0: Understanding the HR-RM Spheres of Application of Responsible Interdependent Relationship 333 Management Communication Tools 38I Contents xvii

6 Responsible Management Communication Tools 383 Phase 2: Evaluation and Elaboration Phase 3: Customizing Stakeholder of the Data 459 Communication 389 Costing Models 459 Responsible Business Performance Metrics 460 A Stakeholder Communication Model 389 Stakeholder Audience Analysis Indicators The Value-Added Model 464 Chapter 13: International Business and Social Return on Investment 466 Management: Glocally Responsible Business 402 Phase 3: Reporting 466 Responsible Management and International Global Reporting Initiative 468 Business 403 Integrated Reporting 470 The Goal: Glocally Responsible Business 405 Auditing and Assurance 471 Ethics of Accounting 474 Phase 1: Understanding the Glocal Business Context 405 Phase 4: Management Control 474 Responsible Management Dashboard 476 G lobalization 406 Localizing Responsible Business 408 Chapter 15: Finance: Responsible Return Phase 2: Assessing the Responsible International on Investment 485 Business 415 Responsible Financial Management 486 A Transnational Perspective of Responsible Management 415 The Goal: Responsible Return on Investment Assess the Type of International Firm the (RROI) 488 Company Is 416 Phase 0: Understanding Financial Assessing the Company's Degree of Global Management 489 Sustainability, Responsibility, and Ethics 417 Mechanisms and Structures of Mainstream Phase 3: Mapping International Business Financial Management 489 Activity 421 Questioning Paradigms of Financial Global Sourcing 423 Management 492 Global Trade 424 Phase 1: Financing Responsible Business 493 Foreign Markets 426 Socially Responsible Investing 495 International Subsidiaries 428 SRI Indices 497 Global Strategie Alliances 430 Activist Shareholding 499 Phase 4: Responsibly Managing in a Globalized Directed Financing: Private Equity and Impact Business 431 Investing 499 Cross-National Diversity Management 432 Alternative Ownership Models 500 Intercultural Management 432 Cross-Financing and Goodwill Financing 502 Cross-Cultural Ethics 434 Debt Financing 503 Phase 2: Capital Budgeting and Programming Interna! Activities PART F: CONTROLLING Calculating the Social Return on Investment 505 Chapter 14: Accounting and Controlling: Subjects of Capital Budgeting 512 Stakeholder Accountability 446 Phase 3: Results and Governance 513 Accounting and Responsible Management 447 From Shareholder-Value- to Stakeholder- The Goal: Stakeholder Accountability 449 Value-Based Management JI3 Corporate Governance and Fiduciary Phase 0: Understand the Basics of Accounting 450 Responsibilities JI5 The Rise of Sustainability Accounting and Its Fiduciary Responsibilities 518 Role in Responsible Accounting 453 Phase 1: Identify the Account and Gather Data 454 Subject Index 527 Materiality 457 Name Index 550 xviii Contents

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SIXTH EDITION BUSINESS IN CONTEXT AN INTRODUCTION TO BUSINESS AND IIS ENVIRONMENT DAVID NEEDLE /V CENGAGE Learning" Australia Brazil Japan Korea Mexico Singapore Spain United Kingdom United States CONTENTS