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Business ethics is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. These ethics originate from individuals, organizational statements or the legal system. These norms, values, ethical, and unethical practices are the principles that guide a business.
Corporate governance are mechanisms, processes and relations by which corporations are controlled and operated ("governed").
Corporate social responsibility (CSR) or corporate social impact is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in, with, or supporting professional service volunteering through pro bono programs, community development, administering monetary grants to non-profit organizations for the public benefit, or to conduct ethically oriented business and investment practices. While once it was possible to describe CSR as an internal organizational policy or a corporate ethic strategy similar to what is now known today as Environmental, Social, Governance (ESG); that time has passed as various companies have pledged to go beyond that or have been mandated or incentivized by governments to have a better impact on the surrounding community. In addition national and international standards, laws, and business models have been developed to facilitate and incentivize this phenomenon. Various organizations have used their authority to push it beyond individual or even industry-wide initiatives. In contrast, it has been considered a form of corporate self-regulation for some time, over the last decade or so it has moved considerably from voluntary decisions at the level of individual organizations to mandatory schemes at regional, national, and international levels. Moreover, scholars and firms are using the term "creating shared value", an extension of corporate social responsibility, to explain ways of doing business in a socially responsible way while making profits.
Governance is the process of making and enforcing decisions within an organization or society. It encompasses decision-making, rule-setting, and enforcement mechanisms to guide the functioning of an organization or society. Effective governance is essential for maintaining order, achieving objectives, and addressing the needs of the community or members within the organization. Furthermore, effective governance promotes transparency, fosters trust among stakeholders, and adapts to changing circumstances, ensuring the organization or society remains responsive and resilient in achieving its goals. It is the process of interactions through the laws, social norms, power or language as structured in communication of an organized society over a social system. It is done by the government of a state, by a market, or by a network. It is the process of choosing the right course among the actors involved in a collective problem that leads to the creation, reinforcement, or reproduction of acceptable conduct and social order". In lay terms, it could be described as the processes that exist in and between formal institutions.
The United Nations Global Compact is a non-binding United Nations pact to get businesses and firms worldwide to adopt sustainable and socially responsible policies, and to report on their implementation. The UN Global Compact is the world's largest corporate sustainability and corporate social responsibility initiative, with 13000 corporate participants and other stakeholders over 170 countries. The organization consists of a global agency, and local "networks" or agencies for each participating country. Under the Global Compact, companies are brought together with UN agencies, labor groups and civil society. Cities can join the Global Compact through the Cities Programme.
In a corporation, a stakeholder is a member of "groups without whose support the organization would cease to exist", as defined in the first usage of the word in a 1963 internal memorandum at the Stanford Research Institute. The theory was later developed and championed by R. Edward Freeman in the 1980s. Since then it has gained wide acceptance in business practice and in theorizing relating to strategic management, corporate governance, business purpose and corporate social responsibility (CSR). The definition of corporate responsibilities through a classification of stakeholders to consider has been criticized as creating a false dichotomy between the "shareholder model" and the "stakeholder model", or a false analogy of the obligations towards shareholders and other interested parties.
The stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees, suppliers, local communities, creditors, and others. It addresses morals and values in managing an organization, such as those related to corporate social responsibility, market economy, and social contract theory.
A contingency theory is an organizational theory that claims that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) upon the internal and external situation. Contingent leaders are flexible in choosing and adapting to succinct strategies to suit change in situation at a particular period in time in the running of the organization.
Business development entails tasks and processes to develop and implement growth opportunities within and between organizations. It is a subset of the fields of business, commerce and organizational theory. Business development is the creation of long-term value for an organization from customers, markets, and relationships. Business development can be taken to mean any activity by either a small or large organization, non-profit or for-profit enterprise which serves the purpose of ‘developing’ the business in some way. In addition, business development activities can be done internally or externally by a business development consultant. External business development can be facilitated through Planning Systems, which are put in place by governments to help small businesses. In addition, reputation building has also proven to help facilitate business development.
Stakeholder analysis in conflict resolution, business administration, environmental health sciences decision making, industrial ecology, public administration, and project management is the process of assessing a system and potential changes to it as they relate to relevant and interested parties known as stakeholders. This information is used to assess how the interests of those stakeholders should be addressed in a project plan, policy, program, or other action. Stakeholder analysis is a key part of stakeholder management. A stakeholder analysis of an issue consists of weighing and balancing all of the competing demands on a firm by each of those who have a claim on it, in order to arrive at the firm's obligation in a particular case. A stakeholder analysis does not preclude the interests of the stakeholders overriding the interests of the other stakeholders affected, but it ensures that all affected will be considered.
Robert Edward Freeman is an American philosopher and professor of business administration at the Darden School of the University of Virginia, particularly known for his work on stakeholder theory (1984) and on business ethics.
The chief sustainability officer, sometimes known by other titles, is the corporate title of an executive position within a corporation that is in charge of the corporation's "environmental" programs. Several companies have created such environmental manager positions in the 21st century to formalize their commitment to the environment. The rise of the investor ESG movement and stakeholder capitalism, has increased the need for corporations to address sustainability and social issues across their value chain, and address growing needs of external stakeholders. Normally these responsibilities rest with the facility manager, who has provided cost effective resource and environmental control as part of the basic services necessary for the company to function. However, as sustainability initiatives have expanded beyond the facility — so has the importance of the position to what is now a C-level executive role. The position of CSO has not been standardized across industries and individual companies which leads it to take on differing roles depending on the organization. The position has also been challenged as symbolic, in that it does not actually have the effect of increasing sustainable practices.
Corporate sustainability is an approach aiming to create long-term stakeholder value through the implementation of a business strategy that focuses on the ethical, social, environmental, cultural, and economic dimensions of doing business. The strategies created are intended to foster longevity, transparency, and proper employee development within business organizations. Firms will often express their commitment to corporate sustainability through a statement of Corporate Sustainability Standards (CSS), which are usually policies and measures that aim to meet, or exceed, minimum regulatory requirements.
Sustainability accounting was originated about 20 years ago and is considered a subcategory of financial accounting that focuses on the disclosure of non-financial information about a firm's performance to external stakeholders, such as capital holders, creditors, and other authorities. Sustainability accounting represents the activities that have a direct impact on society, environment, and economic performance of an organisation. Sustainability accounting in managerial accounting contrasts with financial accounting in that managerial accounting is used for internal decision making and the creation of new policies that will have an effect on the organisation's performance at economic, ecological, and social level. Sustainability accounting is often used to generate value creation within an organisation.
The Friedman doctrine, also called shareholder theory, is a normative theory of business ethics advanced by economist Milton Friedman which holds that the social responsibility of business is to increase its profits. This shareholder primacy approach views shareholders as the economic engine of the organization and the only group to which the firm is socially responsible. As such, the goal of the firm is to increase its profits and maximize returns to shareholders. Friedman argues that the shareholders can then decide for themselves what social initiatives to take part in, rather than have an executive whom the shareholders appointed explicitly for business purposes decide such matters for them.
Stakeholder engagement is the process by which an organization involves people who may be affected by the decisions it makes or can influence the implementation of its decisions. They may support or oppose the decisions, be influential in the organization or within the community in which it operates, hold relevant official positions or be affected in the long term.
A corporate social entrepreneur (CSE) is someone who attempts to advance a social agenda in addition to a formal job role as part of a corporation. It is possible for CSEs to work in organizational contexts that are favourable to corporate social responsibility (CSR). CSEs focus on developing both social capital and economic capital, and their formal job role may not always align with corporate social responsibility. A person in a non-executive or managerial position can still be considered a CSE.
Traditionally, market orientation (MO) focuses on microenvironment and the functional management of an organisation. However, contemporary organisations have widened their focus to incorporate more roles, functions and emphasis on the macro environment. Firms have been concerned with short run success and often not taken into account the long-run ecological, social and economic effects from their activities. Despite growth in the MO concept, there is still a need to reconceptualise the concept with a greater emphasis on external factors that influence a firm.
Ghislain Deslandes is a philosopher born in Angers (France) on the 16th of August 1970.
Values-based innovation is a theoretical concept and managerial approach that “understands and applies individual, organisational, societal, and global values, and corresponding normative orientations as a basis for innovation”. It demonstrates the potential of values to integrate diverse stakeholders into innovation processes, to direct collaborative efforts, and to generate innovations with a positive impact on societal challenges. It elaborates upon the interrelations between innovation management, an established management practice and field of research, and values-based management, which is generally dealt with in business ethics and focuses on the ethical concerns related to corporate management.
References
- ↑ Sowden, Rod (August 30, 2011). Managing successful programmes. Cabinet Office (Stationery Office). p. 59. ISBN 9780113313273.
- ↑ Emanuela Giangregorio, Practical Project Stakeholder Management: Methods, Tools and Templates for Comprehensive Stakeholder Management, 2020, pag 3
- ↑ Association for Project Management (APM). "APM Knowledge Stakeholder management".
- ↑ Gordon E. Greenley and Gordon R. Foxall (2003), "Multiple Stakeholder Orientation in UK Companies and the Implications for Company Performance", Journal of Management Studies, 34, 259–284.
- 1 2 Marchand, Roland (1998). Creating the Corporate Soul: The Rise of Public Relations and Corporate Imagery in American Big Business. California University Press.
- ↑ Freeman, Edward (1984). Strategic Management: A Stakeholder Approach. Harpercollins. ISBN 9780273019138.
- 1 2 Stakeholdermap.com, 7 Principles of Stakeholder Management, accessed 2 January 2023
- 1 2 Berman, S. L; Wicks, A. C; Kotha, S; Jones, T. M (1999). "Does Stakeholder Orientation Matter? The Relationship Between Stakeholder Management Models and Firm Financial Performance". Academy of Management Journal. 42 (5): 488. doi:10.2307/256972. JSTOR 256972., accessed 28 May 2023
- ↑ Value Based Management.net, The Normative Approach to Stakeholder Management, updated 25 March 2008, accessed 28 May 2023
- ↑ Donaldson, T., and Preston, L. (1995), "The stakeholder theory of the corporation: concepts, evidence, and implications", Academy of Management Review, 20: 65–91
- ↑ Fassin, Yves (August 2012). "Stakeholder Management, Reciprocity and Stakeholder Responsibility". Journal of Business Ethics. 109 (1): 83–96. doi:10.1007/s10551-012-1381-8. ISSN 0167-4544. S2CID 254385220.
- ↑ Association for Project Management (APM). "Stakeholder engagement".