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
PR~E Principles for Responsible IWI Management Education
A CRME publication in support of PRME
~- ~ CENGAGE • - Learning·
Australla • Brazll •Japan• Korea• Mexlco • Slngapore • Spaln • Unlted Kingdom • Unlted States
xiv
BRIEF CONTENTS
PART A: BASICS
1 Context: Drivers, Actors, Subjects
2 Management: Basics and Processes
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
1
23
52
83
112
155
186
220
260
299
330
366
402
446
485
527
550
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 Origins of Business Sustainability 55 Sectorial Actors 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
Concepts of Sustainability Internet, Transparency, and Globalization II 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 13 Economic Development versus Sustainable
Economic Crises 14 Development 66 Greenwashing 15 Sectorial Sustainability Footprints 68 Cause Criticism I5 Managing Business Sustainability 70 Applicable for Only a "Selected Few" 15
The Goal: A Neutra/ to Positive Triple Operational Inhibitors I 7 Bottom Line 70
Chapter 2: Management: Basics and Processes 23 Process I: Impact Accounting 7I
Responsible Management 25 Process 2: Impact Management 75
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
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 3 6
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
xvi
155
156
159
160
162
L68
169
L69 L7L L74
175 L7J L77
Chapter 7: Entrepreneurship: Value-Added Ventures
Social Entrepreneurship and Responsible Management
Goal: The Value-Added Venture
186
187
189
Phase 1: Understanding Social Entrepreneurship and Social Innovation 189
Elementary Perspectives of Social Entrepreneurship L89
Economic Systems L9L Identifying the Starting Point for Social
Innovation L93 Implications for Social Entrepreneurship L95 Money, Labor, and Land 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 207
1PART0: 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
223
223
223
226
227
228
230
238
260
262
262
264
Contents
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
The Goal: Responsible Supply and Demand 301 Employee Development 347 Employability 348
Phase 1: Understanding the Supply Chain 302 Phase 3: Performance Management 349 Sltpply Networks 302 Performance Evaluation 349 Mapping Supply Architectures 303 Core Competencies 350 The Role of Small and Medium-Sized Community Involvement and Environmental
Enterprises (SMEs) 304 Stewardship 3JI Social Sustainability 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 354 Supply Chain 3I3 Living Wage 356 Application of QM Principles in Environmental Employee Well-Being 356 Management in OM and SCM 3I5 Ecoefficiency and Ecoeffectiveness 3I6 Phase 5: Employee Relations and Logistics 3I6 Communications 357
Phase 3: Closing the Loop 318 Union-Busting 357
Industrial Ecology 3I9 Employee Communications 358
The Circular Economy 320 Chapter 12: Marketing and Communication: Closed-Loop Supply Chains 32I Stakeholder Goodwill 366 End-of-Life (EOL) Design 322
Marketing, Communication, and Responsible Further Closed-Loop Tools 323 Management 367
The Goal: Stakeholder Goodwill 369
1 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
Responsible Management Communication Tools 383 Phase 2: Evaluation and Elaboration
Phase 3: Customizing Stakeholder of the Data 459
Communication 389 Costing Models 459
A Stakeholder Communication Model 389 Responsible Business Performance Metrics 460
Stakeholder Audience Analysis 391 Indicators 461 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
Phase 1: Understanding the Glocal Business Ethics of Accounting 474
Context 405 Phase 4: Management Control 474
G lobalization 406 Responsible Management Dashboard 476
Localizing Responsible Business 408 Chapter 15: Finance: Responsible Return
Phase 2: Assessing the Responsible International on Investment 485 Business 415
A Transnational Perspective of Responsible Responsible Financial Management 486
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 Global Strategie Alliances
497 430 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
1 PART F: CONTROLLING Interna! Activities 503
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
Phase 0: Understand the Basics of Accounting 450 Corporate Governance and Fiduciary
Responsibilities JI5 The Rise of Sustainability Accounting and Its Fiduciary Responsibilities 518
Role in Responsible Accounting 453 Subject Index 527
Phase 1: Identify the Account and Gather Data 454 Materiality 457 Name Index 550
xviii Contents