Managing Responsibly in a Global Environment

Mary Runte

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Divergent Viewpoints

I am quite willing to pay a man an annual salary of one million dollars, provided that he knows how to glide over every moral restraint with almost childlike disregard, and be ready to kill off thousands of victims without a murmur

Friendship, family, religion, these are the 3 demons you must slay if you want to succeed in business

John D Rockefeller

Monty Burns

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Corporate Responsibility Crisis... “Opinion polls now place business people

in lower esteem than politicians.”-Jennifer Merritt (2002) “For MBAs, Soul Searching 101,” Business Week, Sept. 16, p. 64.

“A W.S.J./NBC poll found that 57% of the general public believed that standards & values of corporate leaders & executives had dropped in the last 20 years.”

-Eric Hellweg (2002) www.business2.0.com, Sept. 10.

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“An ABC News/Washington Post survey indicated 63% of the public felt that regulation of corporations is necessary to protect the public.”

“Seventy-five percent of those surveyed by ABC expressed limited confidence in large corporations.”

-Gary Langer (2002) “Confidence in Business: Was Low and Still Is,” www.abcnews.com, Sept. 10.

Corporate Responsibility Crisis...

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“Suddenly, investors are obsessed with lies, greed and dodgy accounting. It began with the scandal that toppled Enron. Now it has engulfed big and small companies, eroding the markets, investor confidence and America’s image as the economy to emulate.”

-MSNBC “A Guide to Corporate Scandals: Companies Under the Microscope,” http://www.msnbc.com/news/corpscandal_front.asp?odm=C2ORB. Accessed 9/24/2002.

Corporate Responsibility Crisis...

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Developing Trust & Confidence in Business...

– Board members– Top management– Attorneys– Accounting firms– Securities analysts

– Regulators– Politicians– Mass media– Investors– Colleges of business

Individuals alone did not cause our current crisis

Many stakeholders were involved in supporting deception, fraud & destruction

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How does ethical decision making occur in organizations?

The #1 influencer of ethical/unethical behavior is the influence of significant others & the corporate culture

Business ethics in an organization relates to a corporate culture of values, programs, enforcement & leadership

Stakeholders must support organizational ethics initiatives—it’s good business– Stop focusing on the short term!!!

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Companies Under the Magnifying Glass… Livent Adelphia Comm. Arthur Andersen Bristol-Meyers Computer

Associates Dynegy Enron Global Crossing

Halliburton ImClone Systems Merrill Lynch Qwest Comm. Tyco Intl. WorldCom Xerox

-MSNBC “A Guide to Corporate Scandals: Companies Under the Microscope,” http://www.msnbc.com/news/corpscandal_front.asp?odm=C2ORB. Accessed 9/24/2002.

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What does fraud cost?

Cost to corporations: > $400 billion a year Organizations lose $9/day/employee Median loss caused by males: $185,000 Median loss caused by females: $48,000

“Fraud Group Warns of Theft,” Boston Sunday Globe, 2/3/2002.

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Other issues

Environment– Kyoto

Wage equity Third world

…..

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Where did the Enron ‘infamous’ get their degrees? Ken Lay—bachelors and masters degree in

economics from University of Missouri Jeffrey Skilling—applied science from SMU

and MBA from Harvard Andrew Fastow—economics from Tufts and

MBA from Northwestern Robert K. Jaedicke (board member)—former

Dean of the Graduate School of Business, Stanford University & Stanford graduate

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What are schools of business doing?

Developing programs & courses to address corporate responsibility

Encouraging faculty to integrate ethics into current curriculum

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This course

This course will examine the forces shaping management decision-making in an organizational environment characterized by the process of globalization. The interaction of the political, legal, regulatory and social environments in which an organization operates will be assessed in relation to ethical decision-making, stakeholder management, sustainability, and corporate citizenship.

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In other words…

a) Students will be able to identify and apply ethical models to organizational decision processes

b) Students will demonstrate knowledge of the legal, regulatory, political and social frameworks, both domestic and international, within which contemporary organizations operate

c) Students will be able to critically evaluate the changing roles and responsibilities of corporations and other organizations in a globalized world.

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Why?

Reasons for importance Business Demands it

– The role of trust– Deterring government intervention

Public demands it• Ethical investment• Human rights• Environmentalism

– The Media Spotlight• Firestone• Nike• Enron• Shell

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How

Experiential activities Case studies Critical readings with focus on ideas and

concepts Independent learning Class discussion

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Assessment

Ethics and CSR concept exam Case exam Participation Group Case

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Expectations

Critical not CRITICAL Respect for differing views vs respect for

difference. Inclusive language

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For next week…

Debate on the role of business– A-L: “The role of business is solely to increase

profits for shareholders”– M-Z: “The role of business is NOT solely to

increase profits for shareholders:

Virtue Matrix