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Transcript
UNIT 2.1 : MANAGEMENT AND SOCIETY RELATIONSHIP BETWEEN MANAGEMENT AND SOCIETY Successful organisations not only focus their efforts on satisfaction of customers (and other stake holders), but also on society in general. They attempt to contribute to the well being of the society in & around their operations. EXTERNAL/MACRO ENVIRONMENT • All organisations, operate amidst changing external environment, that affects their strategies. Hence management must consider external factors for effective decision making. • The major external and uncontrollable factors that influence an organisations decision making, and affect its performance and strategies are : economic factors; demographics; legal, political, and socio-cultural conditions; technological changes; competitive conditions and natural forces. MACRO ENVIRONMENT AFFECTING ORGANIZATION SOCIAL CULTURAL LEGAL TECHNOLOGICAL ORGANIZATION COMPETITIVE POLITICAL DEMOGRAPHIC ECONOMIC CORPORATE SOCIAL RESPONSIBILITY (CSR) • While there is no universal definition of corporate social responsibility, it • generally refers to transparent business practices that are based on ethical values, compliance with legal requirements, and respect for people, communities, and the environment. Thus, beyond making profits, companies are responsible for the totality of their impact on people and the planet Within the world of business, the main “responsibility” for corporations has historically been to make money and increase shareholder value. In other words, corporate financial responsibility has been the sole bottom line driving force. However, in the last decade, a movement defining broader corporate responsibilities– for the environment, for local communities, for working conditions, and for ethical practices–has gathered momentum and taken hold. This new driving force is known as corporate social responsibility (CSR). CORPORATE SOCIAL RESPONSIBILITY (CSR) • Key CSR issues: Environmental management, eco-efficiency, responsible sourcing, labour standards and working conditions, employee and community relations, social equity, gender balance, human rights, good governance, and anti-corruption measures. EXAMPLES OF CSR Costa Coffee : Since 2008, the company's CSR programme hires differentlyabled employees, including the speech and hearing impaired. For example training programs have been adapted to sign language and all store managers, irrespective of who their employees are, are required to undergo sign language training. Costa’s CSR initiative benefits those whose opportunities may have otherwise been limited. This program has been so successful that speech and hearing impaired employees account for 15% of company’s overall employee ratio, a number that the Costa plans to increase over the coming year. EXAMPLES OF CSR • Zappos is a company creating a social impact with a shoebox. Zappos is known for a company culture that focuses on the well being of their employees and they are on a mission to make the world a better place, for everyone. They donate huge amounts of Zappos goods to tons of charitable organizations. Their employees are paid for time off if they are volunteering, because Zappos knows 9-5 isn’t the only work that matters. EXAMPLES OF CSR • Dell supports over 4,615 charities around the world. Dell Youth Connect provides technology and educational facilities in 11 countries. The Dell Social Innovation Challenge provides funding and mentorship to college students to further projects that help solve social problems. Dell’s disaster relief program provides holistic assistance to communities affected by natural disaster around the world. ADVANTAGES OF CSR • The organizations that integrate CSR as part and parcel of their philosophy of growth, derive various advantages as: • • Improved financial performance & cost reduction (energy saving programs like less • packaging, staff retention, less money on traditional advertising etc..) • Enhanced brand image and reputation • Increased customer satisfaction and retention • • Environmental sustainability Generate positive publicity and media opportunities due to media interest in ethical business activities Increased market share And above all competitive edge in the market ETHICS • Ethics deal with moral principles and social values. It helps us to classify, what is good and what is bad? It tells us to do good things and avoid doing bad things. Ethics separate, good and bad, right and wrong, fair and unfair, moral and immoral and proper and improper human action. Ethics are relied upon to reach conclusions and make decisions. BUSINESS ETHICS • Business Ethics means the businessmen must give a regular supply of good quality goods and services at reasonable prices to their consumers. They must avoid indulging in unfair trade practices like adulteration, promoting misleading advertisements, cheating in weights and measures, black marketing, etc. They must give fair wages and provide good working conditions to their workers. They must not exploit the workers. They must avoid monopolies. They must pay all their taxes regularly to the government. Even if you believe that good business ethics don't contribute to profit levels, you should be able to recognise that poor ethics can have a detrimental effect on your bottom line in the long term. ETHICAL DILEMMA An ethical dilemma, is a situation where the guiding principles of our everyday life cannot determine whether a particular course of action is right or wrong. It is like choosing between two evils but in in which ever choice is chosen, no good will been done. Sometimes it is a conflict between your personal values and your professional ethics ETHICAL DILEMMA EXAMPLE A student who is from a single parent family. The student must work to attend college. However, the job is interfering with the student’s performance and several assignments have not been turned in. You have determined that a “D” is all the student can make when a counselor informs you that the student need a “C” to qualify for an academic scholarship.’ What do you do? ETHICAL DILEMMA EXAMPLE • You are a bank teller, your daughter is extremely ill and the operation will cost 10,00000. Should you take10,00000 from a dormant account at the bank to pay for the operation ? • What do you do? CORPORATE GOVERNANCE The system of rules, practices and processes by which a company is directed and controlled is called Corporate governance. It essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community. BROAD CATEGORIES OF BAD CORPORATE GOVERNANCE • Hiring candidates based on emotion, friendship, glossy resumes or even reputation…and certainly not without a thorough vetting of all potentials for leadership roles. • Ignore the importance of performance-based executive compensation, particularly in times of turbulence, to ensure alignment with the core strategy. • Be afraid of making bold leadership changes if the company is in need of a fresh approach.