PRINCIPLES OF RESPONSIBLE MANAGEMENT Glocal Sustainability, Responsibility, and Ethics C o n t e n t s C h a p t e r C o n t r i b u t o r s 1 4 PART A: BASICS Aurea Christine Tanaka, United Nations Barbara Coudenhove-Kalergi, Center University Institute of Advanced Studies (Shortage for Responsible Management, Vienna 1) Context: Drivers, Actors, Subjects of water…, Empowering women in rural Bangladesh (Engagement success…) 2) Management: Basics and Processes …, and Global Compact …) Dewi Fitraasari, School of Accounting and Bligh Grant, UNE Business School, University Finance, Bina Nusantara University, Jakarta of New England (Just “talking the talk”?) (Strategic positioning from oil to…) PART B: DOMAINS Dewi Fitraasari, School of Accounting and Oliver Laasch, Tecnológico de Monterrey 3) Sustainability: Managing for Finance, Bina Nusantara University, Jakarta (Chapter author) the Triple Bottom Line (MDGs and CSR …) Edward Freeman, Darden School of Business 4) Responsibility: Managing for Oliver Laasch, Tecnológico de Monterrey at the University of Virginia (Pioneer Interview) Stakeholder Value (Chapter author) Sudhir Kumar Sinha, Sipla (Practitioner Profile) 5) Ethics: Managing for Moral Bjoern Stigson, World Business Council for Sustainable Development (Pioneer Interview) 5 Excellence Bligh Grant, University of New England Business Narine Arustamyan, VivaCell-MTS School (Tough decision: CEO grounds airline...) (Practitioner Profile) PART C: PLANNING Josie Fisher, University of New England Business 2 School (A virtuous business?, Core Values: ..., 6) Strategy: Responsible Aurea Christine Tanaka, United Nations Operationalizing ... , Measuring ethics ..., Corporate Competitiveness University Institute of Advanced Studies whistleblowers..., and Expensive advice...) 7) Entrepreneurship: Value-Added (Responsibly building capacity…) Matthias Wühle, Policen Direkt (Developing Ventures Eappen Thiruvattal, University of Dubai a professional ethics ...) (A need for awareness and skill development Sharon Dafny, Management Consultant in the UAE) (Values-driven ethical fashion) PART D: ORGANIZING Isabel Rimanoczy, Fordham University Oliver Laasch, Tecnológico de Monterrey 8) Organization: Responsible (Special perspective: How to become a Big Bang Being) (Chapter author) Infrastructure Kemi Ogunyemi, Lagos Business School, Linda K. Treviño, SMEAL College of Business, 9) Operations: Responsible Enterprise Pan-African University (Leading toward a Pennsylvania State University (Pioneer Interview) sustainable Africa) Excellence John C. Lenzi, ITT Corporation Shiv K. Tripathi, Mzumbe University (Integrating 10) Supply Chain: Responsible Supply (Practitioner Profile) social and economic goals through e-Choupal) and Demand Ulpiana Kocollari, University of Modena 6 (Responsible management and business in Nick Tolhurst, Steinbeis University Berlin PART E: LEADING the 1930s?) (Betapharm case) Oliver Laasch, Center for Responsible Oliver Laasch, Tecnológico de Monterrey 11) Human Resources: HR-RM Symbiosis Management Education (Chapter author) (Chapter author) 12) Marketing and Communication: Jonas Härtle, Head of PRME Secretariat Cansu Gedik, Mikado Consulting Stakeholder Goodwill (Pioneer Interview) (Practitioner Profile) 13) International Business and Manage- Thomas Hügli, AXA Winterthur Mark Kramer, FSG (Pioneer Interview) ment: Glocally Responsible Business (Practitioner Profile) 7 3 Martin Perry, School of Management, Massey PART F: CONTROLLING John Elkington, Volans (Pioneer Interview) University (Inside and outside ..., New Zealand public agency reform ... and Special perspective: Sustainable 14) Accounting and Controlling: Judith Ruppert, 360 Environmental innovation primer) Stakeholder Accountability (Practitioner Profile) Rory Ridley-Duff, Sheffield Hallam University 15) Finance: Responsible Return Oliver Laasch, Sustainable Consumption (Chapter author) on Investment Institute, The University of Manchester (Chapter author) Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 14 Michael Bull, Manchester Metropolitan Ulpiana Kocollari, University of Modena (Food Aurea Christine Tanaka, United Nations University (Chapter co-author) security as an example for social supply chain sustainability) University Institute of Advanced Studies (Indicators for social entrepreneurship) Oliver Laasch, Steinbeis University Berlin Zhaohui Wu, Oregon State University (Chapter author) (Chapter editor) Kemi Ogunyemi, Lagos Business School, Pan-African Oliver Laasch, Steinbeis University (Chapter co-author) University (Developing triple-bottom-line indicators…) Mark Kramer, FSG, (Pioneer Interview) Michael Braungart, Erasmus University Loretta O´Donnell, Australian School of Business, Doru Mitrana, MVV, (Practitioner Profile) (Pioneer Interview) University of New South Wales (From human Mariné Rodríguez Azuara, AES (Practitioner Profile) capital to…) 8 Aurea Christine Tanaka, United Nations Martin Perry, School of Management, Massey 11 University Institute of Advanced Studies University (Auditing social accounts in New Zealand) Roger N. Conaway, Monterrey Institute of (Structuring for responsible performance) Technology (Chapter author) Shel Horowitz, GreenAndProfitable.com Jane Best, Refugees in Japan (Multi-organization (Did we miss something?) Elaine Cohen, Beyond Business, (Chapter co-author) architectures) Ulpiana Kocollari, University of Modena Oliver Laasch, Center for Responsible Management Jürgen Wittstock, Keio University (Chapter author) Education (Chapter editor) (Multi-organization architectures) Daniel Ette, Hansgrohe (Practitioner Profile) Erika Guzman, Innovation Packaging & Process Ulpiana Kocollari, University of Modena S.A. de C.V. (Practitioner Profile) Nick Tolhurst, Steinbeis University, (Section (Afuture- programming for sustainability) contributor: Understanding the Basics of Accounting) Sharon Dafny, Management Consultant 12 (Box contributor Challenges for organizational change) Shel Horowitz, GreenAndProfitable.com 15 (Market differently to green and nongreen Audiences) Ajay Jain, Aarhus University (Fiduciary Oliver Laasch, Center for Responsible Management irresponsibility – corruption) Education (Chapter author) Pablo Largacha, The Coca Cola Company (Coca Cola´s “secret recipe” for effective stakeholder Anis Ben Brink, CSR Arabia (Leading financial and Roger Conaway, Tecnológico de Monterrey communication) responsible management practices in the Middle East) (Chapter co-author) Roger N. Conaway, Tecnológico de Monterrey Aurea Christine Tanaka, United Nations Simon Zadek, Tsinghua School of Economics and (Chapter author) University Institute of Advanced Studies Management (Pioneer Interview) (Maximizing stakeholder return …) Oliver Laasch, Tecnológico de Monterrey 9 (Chapter co-author) Charles Mc Jilton, Second Harvest (Unsellable Anis Ben Brink, CSR Arabia (Biking for eco-efficiency, food finance) Philip Kotler, Kellogg School of Management at and Setting multiple operational benchmarks) Northwestern University (Pioneer Interview) Dewi Fitraasari, School of Accounting and Aranzazu Gomez-Segovia, Center for Responsible Finance, Bina Nusantara University, Jakarta Adela Lustykova, Chládek & Tinteˇra, Inc. Management Education (The illusion of waste) (Mandatory CSR budgeting) (Practitioner Profile) Aurea Christine Tanaka, United Nations John Bayles, Tengu Natural Foods (Unsellable University Institute of Advanced Studies (A question 13 food finance) of the right process) Al Rosenbloom, Dominican University Jürgen Wittstock, Keio University (Unsellable (The world´s trash can …, Sweet business…, and Ulpiana Kocollari, University of Modena food finance) Harnessing ethnic diversity …) (Box contributor COPIS for health and food safety) Martin Perry, School of Management, Massey Barbara Coudenhove-Kalergi, Center for Rick Edgeman, Aarhus University (Chapter author) University (Ethical financing in New Zealand) Responsible Management, Vienna (Critical stakeholder Oliver Laasch, Sustainable Consumption Institute, demand in Bulgaria…) Reinhard Schmidt, Goethe University Frankfurt University of Manchester (Chapter co-author, editor) (Expert Corner Interview: Microfinance) Jenik Radon, School of International and Public Zhaohui Wu, College of Business, Oregon State Affairs, Columbia University (A glocal approach Sharon Dafny, Management Consultant (Reducing University, (Chapter co-author) against corruption) cost by creating “diverse” jobs in Israel) Sandra Waddock, Carroll School of Management, Shiv K. Tripathi, Mzumbe University Oliver Laasch, Sustainable Consumption Institute, Boston College (Pioneer Interview) (Developing a sustainable export business) The University of Manchester (Chapter author) Cecilia del Castillo, Eaton (Practitioner Profile) Mahima Achuthan, Columbia University Nick Tolhurst, Steinbeis University Berlin (A glocal approach against corruption) (Chapter co-author) 10 Nick Tolhurst, Steinbeis University Berlin Robert Costanza, Portland State University, Oregon Al Rosenbloom, Dominican University (Engaging (Introductory case, topic adviser) (Pioneer Interview) back to the source – into the Amazon) Roger Conaway, Tecnológico de Monterrey Francisco Acuña Mendez, InTrust (Practitioner Profile) Anis Ben Brink, CSR Arabia (Green logistics and (Chapter author) transportation fleet in the middle-East) Oliver Laasch, Center for Responsible Rick Edgeman, Aarhus University (Chapter Management Education (Chapter co-author) co-author) By Oliver Laasch and Geert Hofstede, (Pioneer Interview) Matthias Wühle, Policen Direkt (Unusual recycling) Laura Clise, AREVA (Practitioner Profile) Roger N. Conaway Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Principles of RESPONSIBLE MANAGEMENT Glocal Sustainability, Responsibility, and Ethics Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Principles of RESPONSIBLE MANAGEMENT Glocal Sustainability, Responsibility, and Ethics Oliver Laasch Center for Responsible Management Education (CRME) and University of Manchester Roger N. Conaway Tecnológico de Monterrey A CRME publication in support of PRME Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. C O N T E N T S Principles of Responsible Management: Glocal © 2015 Cengage Learning Sustainability, Responsibility, and Ethics WCN: 02-300 Oliver Laasch and Roger N. Conaway ALL RIGHTS RESERVED. No part of this work covered by the copyright herein Senior Vice President, Global Product Manager, may be reproduced, transmitted, stored, or used in any form or by any means Higher Education: Jack W. Calhoun graphic, electronic, or mechanical, including but not limited to photocopying, Vice President, General Manager, Social Science & recording, scanning, digitizing, taping, web distribution, information networks, Qualitative Business: Erin Joyner or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written Product Director: Mike Schenk permission of the publisher. Senior Product Managers: Michele Rhoades & Mike Roche For product information and technology assistance, contact us at Senior Content Developer: Susan Smart Cengage Learning Customer & Sales Support, 1-800-354-9706 Product Assistant: Tamara Grega For permission to use material from this text or product, Senior Marketing Manager: Robin LeFevre submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to Senior Content Project Manager: Colleen A. [email protected] Farmer Manufacturing Planner: Ron Montgomery Library of Congress Control Number: 2013946384 Production Service: diacriTech ISBN-13: 978-1-285-08026-0 Sr. Art Director: Stacy Jenkins Shirley Cover and Internal Designer: Red Hangar ISBN-10: 1-285-08026-2 Design/Joe Devine Cover Image: © Sapsiwai/Shutterstock Cengage Learning Rights Acquisitions Specialist (Text and Photo): 200 First Stamford Place, 4th Floor Amber Hosea Stamford, CT 06902 USA Cengage Learning is a leading provider of customized learning solutions with office locations around the globe, including Singapore, the United Kingdom, Australia, Mexico, Brazil, and Japan. Locate your local office at: www.cengage.com/global Cengage Learning products are represented in Canada by Nelson Education, Ltd. To learn more about Cengage Learning Solutions, visit www.cengage .com Purchase any of our products at your local college store or at our p referred online store www.cengagebrain.com Printed in Canada 1 2 3 4 5 6 7 17 16 15 14 13 Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. C O N T E N T S P R E F A C E Welcome to the first comprehensive textbook for responsible management educa- tion, Principles of Responsible Management: Glocal Sustainability, Responsibility, and Ethics. While the community of practice for responsible management education has grown exponentially, reaching impressive practice results, the development of a shared basic content structure for responsible management courses has been lagging behind. This book aims to close this gap. Through our work with many educator colleagues in the United Nations Principles for Responsible Management Education (PRME) network, we have seen an increasing shift from the traditional organizational course focus on “What should businesses be and do?” to a focus on the individual level of the single manager as a person, asking “Who should the manager be, what should he or she do, and how should he or she do it?” The shift goes from business sustainability to sustainability management, from business responsibility to responsibility management, and from business ethics to ethics management. Many of the traditional courses in business ethics and business and society are currently experiencing a fundamental shift from the organizational to the individual perspective. Courses sticking to the organiza- tional perspective are enriched by integrating the individual perspective, which explains how employees, especially managers, can act as intrapreneurs, making their organization more responsible. This book aims to be a resource to efficiently and effectively realize this important transition. The organizational perspective is still an important basis of this book and educa- tors will find many of the established topics traditionally taught. But we also have included information about the logical next evolutionary step of translating the organizational vision into the managerial and operational achievement of this vision by a responsible manager. What we hope to achieve with this book is to provide both experienced educators and those first entering the field of responsible busi- ness and management with a resource that helps them to empower thousands of individual students around the world to become responsible managers, to be change agents, and to act as the human foundation for responsible businesses in order to achieve a responsible socioeconomic system and a sustainable world society. APPROACH, CONCEPTUAL STRUCTURE, AND TERMINOLOGY Principles of Responsible Management provides business students with the necessary knowledge, tools, skills, and self-perception to become responsible managers. In order to realize these goals, we provide a very profound overview of the conceptual development of the field of responsible business and manage- ment. Toward that end, we have pursued several educational and conceptual vii Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.