Managing Social Responsibility 2022 BINUS University PDF

Course: MGMT6011020 - Introduction to Management and Business Effective Period : even semester 2022 Managing Social Responsibility Targeted Learning Outcome : LO2: explain managing social responsibility. Material References...

Course: MGMT6011020 - Introduction to Management and Business Effective Period : even semester 2022 Managing Social Responsibility Targeted Learning Outcome : LO2: explain managing social responsibility. Material References : Sloman, John, Jones,Elizabeth, Essential Economics for Business, 2019, pearson, Singapura  Sub topic Green Management and Sustainability Two Opposing Views What Is Social Responsibility?  Social responsibility An organization professes its commitment to sustainability yet packages its products in nonrecyclable materials. Managers regularly face decisions that have a dimension of social responsibility in areas such as employee relations, philanthropy, pricing, resource conservation, product quality and safety, and doing business in countries that devalue human rights.  Two Opposing Views THE CLASSICAL VIEW THE SOCIOECONOMIC VIEW The most outspoken advocate The socioeconomic position of the classical view was counters that society has economist and Nobel Laureate higher expectations of Milton Friedman. business. Corporations are Their argued that most chartered by state managers today are governments. So corporations professional managers, which are not independent entities, means that they don’t own responsible only to the businesses they run. stockholders. They also have a responsibility to the larger They’re employees, society that creates and responsible to the sustains them. stockholders. Their primary charge conduct the business One author, in supporting the stockholders interests single socioeconomic view, once concern : financial return. noted that “maximizing profits is a company’s second priority, not its first. The first is ensuring  The arguments for and against business assuming social responsibilitie  From Obligations to Responsiveness to Responsibility We can understand social responsibility better if we compare it with two similar concepts: social obligation and social responsiveness. A business has fulfilled its social obligation. when it meets its economic and legal responsibilities and no more. It does the minimum that the law requires. A firm pursues social goals only to the extent that they contribute to its economic goals. In contrast to social obligation, both social responsibility and social responsiveness go beyond merely meeting basic economic and legal standards. Social responsibility adds an ethical imperative to do those things that make society better and not to do those that could make it worse. Social responsiveness refers to the capacity of a firm to adapt to changing societal conditions.  Social Responsibility and Economic Performance Most of these studies have found a small positive relationship, although some critics have challenged the direction of causation. The social involvement and economic performance are positively related, this correlation doesn’t necessarily mean that social involvement caused higher economic performance—it could simply mean that high profits afford companies the “luxury” of being socially involved.  Socially responsible activities lower a company’s economic performance There is little evidence that social actions actually hurt a company’s economic performance. Even if the positive effect is small, being socially responsible makes good sense. Given the current political and social pressures on business to pursue social goals, this may have the greatest significance for managerial decision making. Green management and sustainability Nike has launched an app called Making, which allows its design engineers to see the environmental effects of their material choices on water, energy, and waste. Did you know that planning a driving route with more right-hand turns than left can save fuel? UPS does. That’s just one of many stats that UPS can quote about how research-based changes in its delivery route design contribute to the sustainability of the planet. Being green is in. Today, managers are making a more substantial effort to consider the impact of their organization on the natural environment. For example, UPS considers ways to save on fuel when planning a driving route, contributing to the sustainability of the planet (Source: Victor Maschek/Shutterstock). However, several environmental disasters have brought a new spirit of environmentalism to society and organizations. Increasingly, managers have begun to consider the impact of their organization on the natural environment, which we call green management  How Organizations Go Green A number of organizations have radically changed their products and production processes as part of their efforts to protect and preserve the natural environment. For instance, Fiji Water uses renewable energy sources, preserves forests, and conserves water. Carpet-maker Mohawk Industries uses recycled plastic containers to produce fiber used in its carpets. Adidas is working with social awareness-raising network Parley for the Oceans to make sportswear from recycled ocean waste. Although interesting, these examples don’t tell us much about how organizations go green. We’ll use the shades of green model to describe the different environmental approaches that organizations can take  How Organizations Go Green The first approach, the legal (or light green) approach, is simply doing what is required legally. In this approach, which illustrates social obligation, organizations exhibit little environmental sensitivity. They obey laws, rules, and regulations without legal challenge, and that’s the extent of their being green. As an organization becomes more sensitive to environmental issues, it may adopt the market approach and respond to the environmental preferences of customers. Whatever customers demand in terms of environmentally friendly products will be what the organization provides. For example, SC Johnson collaborated with a European company to develop an environmentally friendly alternative to the original formulation of Saran Wrap, which had come under criticism for containing polyvinyl chloride (PVC). Even though the reformulated Saran Wrap product does not work as well as the original in keeping food odors within the wrapping, SC Johnson decided not to return to the original formulation.13 This is a good example of social responsiveness, as is the next approach.  Evaluating Green Management Actions As businesses become “greener,” they often release detailed reports on their environmental performance. More than 7,500 companies around the globe now voluntarily report their efforts in promoting environmental sustainability using the guidelines developed by the Global Reporting Initiative (GRI). These reports describe the numerous green actions of these organizations. One final way to evaluate a company’s green actions is to use the Global 100 list of the most sustainable corporations in the world. To be named to this list, a company has displayed a superior ability to effectively manage environmental and social factors. In 2018, European companies led the list with fifty-nine Global 100 companies representing a variety of industries.20 North American companies followed with twenty-two. The remaining nineteen spots were earned by companies from Asia, Africa, and Australia. The top three spots were taken by Dassault Systèmes (France), Nestlé (Finland), and Valeo (France). Other companies on the 2018 list included BMW (Germany) and Cisco Systems (USA). ThAnKs YoU