Sustainability And Corporate Responsibility In Business Essay.

Part A

Part A

1. For some business leaders, sustainability has been about ‘greening’ their businesses or ‘going green’ for altruistic reasons; to ‘save the planet’ or to be seen to be ‘doing the right thing’. However, the business sector is beginning to recognise that ‘sustainable business is smart businesses and that adopting sustainable business approaches can create opportunities for growth and development. (You should aim to write at least 600 words in response to this question)

 Discuss what sustainability means for business (10 marks) and how sustainable business approaches can achieve improved business performance. 

1. Nobel Prize winning economist Milton Friedman argued “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”. (You should aim to write at least 600 words in response to this question)

To what extent does Friedman’s approach to business social responsibility align with the principles of responsible business outlined in the United Nation’s Global Compact?

Discuss the extent to which you agree or disagree with Friedman’s view.

Part B

B1.  In ‘The Story of Stuff’ video clip, Annie Leonard describes the materials economy (i.e. the system that produces all our 'stuff’), as being 'a system in crisis'.

Identify and describe the five main components in this system (5 marks) and discuss the impacts of this system (5 marks).

B2.   For many businesses, improving their sustainability performance has meant measuring and   reporting on their Triple Bottom Line impacts.

Describe the components that comprise the Triple Bottom Line. (3 marks)

Apply the Triple Bottom Line approach to a gold mining company operating in Australia.

Describe the performance indicators or measurable impacts that this company would use to measure and report on the Triple Bottom Line impacts of its business activities.

B3.    With many companies now producing reports on their corporate social responsibility and/or sustainability performance, or activity promoting their ‘green’ credentials through their advertising and other promotional material, some have been accused of ‘greenwashing’.

What is greenwashing’ and why is this something that businesses should try to avoid?.

B4. The current rates of rapid global population growth, the continued economic development of developing countries and high rates of consumption in developed countries are three of the drivers that have seen sustainability emerge as a global priority. 

Discuss the impacts of each of the three abovementioned drivers and the role for business in reducing these impacts .

B5. In recent years, there have been many news articles highlighting the failure of major corporations and regulatory authorities to adequately monitor the ethical standards and practices of their supply chains.

By citing an example of recent media news about a business’s engagement in supply chain (3 marks), justify why supply chain management is important to socially responsible business practices?

Part C (You should aim to write at least 800 words in response to Part C)

Student Privileges with Strings Attached  (please refer to attachment - Student-Privileges-With-Strings-Attached_S)

William was delighted when he was selected for a very competitive internship at a consulting firm near his university. Many students had applied, and William was one of only two interns selected. William was immediately assigned to work with Timothy, a recent MBA graduate, on a major assignment for a new client, a company that created electronic games and sold them worldwide. The client had commissioned William's consulting firm to do an industry analysis that included a study of the demographics of game users in key countries in Europe and Asia as well as in North America. From his own experience as a student, Timothy knew that William could access and download a series of reports on the demographics of game users in various countries around the world from one of the university’s electronic resources, the E-Marketer Database. Because he was a current student, William could access the reports for free using his university electronic identification (EID) and password. If the consulting firm were to purchase the reports, they would cost about $800 each, so the total expenditure would be thousands of dollars. Timothy asked William to write his university EID and password on a notepad and give it to him, so that he could download the reports and any other university resources that they might need. It would only take a few clicks to download the reports to Timothy’s computer desktop, and it would save an enormous amount of money. Nonetheless, William did not feel comfortable with Timothy’s request. In a marketing research course, William had learned that the university’s licenses to use databases such as E-Marketer were very detailed and specifically restricted to educational uses by the university’s students and faculty. Timothy's request was a direct violation of these licenses and William knew he did not want to participate.

C1. Who are the key stakeholders and what is at stake for these key parties?

C2. What are the reasons and rationalizations that may be used to justify the behaviour and/or business practice that is causing this scenario’s ethical dilemma?

C3. What levers/responses can the central character use to enable her to act on her values in a way that maximizes the positive impact and minimizes negative outcomes for all parties?

C4. Develop a script that applies the GVV framework to this scenario. This script should include dialogue of a conversation with one or more key stakeholders in which the main character is able to give voice to her/his values and provide a powerful and persuasive response to this ethical dilemma.

Question: a

Sustainability is having broader meanings for the business organizations. At one point of time, it was perceived that, sustainability is related to the welfare of the environment, planet and people. Moreover, it was also perceived that, initiation of the sustainable approach will lead to the added cost for the business organizations and will have negative impact on their financial performance. However, currently, sustainability refers to the maximization of the business potentiality of the organizations also. This is by the way that, initiation of the sustainable business operation will help the business organizations to grow responsibly in the future and to have their business intact in the future also without facing any uncertainty. In the current situation, sustainability refers to the immunity of the business organizations in dealing with the current global challenges.

Initiation of the sustainable business approaches will lead to the improvement in the performance of the business organizations. There are various reasons behind this concept. One of the key reasons is that, sustainable business approaches enable the organizations to enhance the effectiveness of their production process by reducing the cost of the production process. For instance, Interface Inc. increased the process of recycling their waste materials. It is reported that, 49 percent of the total raw materials of them are now being recycled and reused. Thus, this is having dual benefits for them. One of the key benefits is that, it helped in taking care of the planet by exploiting less resources and another benefit is that, the cost of sourcing of raw materials for Interface Inc. got reduced by recycling and recuing the old materials. Therefore, it helped them in gaining cost leadership from the production process.

Another advantage being gained by Interface Inc from the initiation of the sustainable business approaches is the reduction in the cost of waste management. Interface being a carpet manufacturing organization have to maintain a huge waste management mechanism. However, with the recycling and reusing the raw materials, the generation of the waste got reduced for them. It is reported that, from the reduction of the waste management cost, Interface has saved of over $450 million. Thus, rather than depreciating the financial performance of the organization, initiation of the sustainable business approaches are helping them in enhancing their business performance.

Another performance improvement that is gained by Interface Inc. from the initiation of the sustainable business approaches is the reduction in the cost of energy. According to the report, they have reduced the use of total energy in all their facilities by 39 percent. Thus, reduction in the consumption of energy also leads to the reduction in the cost for it. Thus, interface Inc. is again saving a good amount of money from the less consumption of energy. Therefore, it can be concluded that smartly integrating and implementing the sustainable business principles will help the business organizations in enhancing and improving their organizational performance rather than causing added cost for it. In the long term it will also help them in gaining competitive advantages in the market.

Part B

Question: b

The principles stated in the United Nation’s Global compact discussed about the duties and responsibilities of the business organizations towards the communities in due course of their business operation. On the other hand, Friedman’s approach to the social responsibility of the business also states what to do by the business organizations in relation to their social responsibilities. Majority of the elements between these two approaches are different. However, there are similarities also being identified. One of the key alignments of the Friedman’s approach with that of the United Nation’s global compact is the basic objective of the businesses. Both the approaches are having the statement that the basic objective of the business organizations is to obtain profit from their business operations.

Another similarity between these two approaches is that, both the approaches have stated the importance of obtaining and maximizing profit in responsible manner and with the business ethics in consideration. According to the Friedman’s approach, it is the responsibility of the business organizations to drive their business operation in open and free competition and without having any coercion and fraud. On the other hand, the approach of United Nation Global Compact states that, business organizations should stay away from corruption in their business operation. Thus, this principle is being stated by both the approaches.

Thus, Friedman’s approach of social responsibility of businesses is aligned with the principles being stated in the United Nation Global Compact up to the extent of basic objective of the business organizations. Obtaining and maximizing profit is the basic objective of the business organizations and they should do it by considering the ethical behavior is the key similarity between the two approaches. Friedman’s approach to the social responsibility is more general in nature compared to the specific areas being stated in the United Nation Global Compact.

According to me, Friedman’s view of social responsibility is much applicable and will be effective in the current business scenario. This is due to the reason that, according to the Friedman’s approach, business organizations should be responsible only for their shareholders and maximizing the profit and enhancing the return of the shareholders should be the one and only objective of the business organizations. However, in the current business scenario, business organizations have to adhere with various legal and social factors in operating in a particular country. These factors include management of the employees, management of the customers, environmental impact and human rights clause. Friedman’s approach is not considering all these factors contemporary factors being faced by the business organizations. Hence, I will not agree with the view of Friedman’s in relation to the social responsibility of the business organizations. According to me, apart from the shareholders, business organizations are also responsible towards the surrounding communities and planet due to the fact that they are sourcing the raw materials from the surrounding itself.

Part C

PART: B

Question: B1

The five main components being identified in this material system by Annie Leonard are the Extraction, production, distribution, consumption and disposal. Extraction refers to the process of exploiting the natural resources of the earth. According to the authors, natural resources required for the material economy to produce more consumer goods are being extracted from the nature through extraction.

The next element is the production. This refer to the process of mixing up toxic chemicals with that of the natural resources being extracted and producing new consumer products in the market. This process is the key due to the reason that, the process of consumption starts right from here along with exposure of the human beings towards more contamination of toxic materials.

The next element is the distribution. This refer to the process of transportation of the raw materials from different locations around the world to the production centre and transporting the finished consumer products to various sales point around the world for the end consumers. Consumers are gaining the access of the finished products through this element.

The next step is the consumption. This process refers to consuming the goods being produced by the consumers. This element is the ultimate objective of the material economy due to the reason that, the increased rate of production of consumer goods will only be beneficial when consumers will consume all of these. Moreover, with the rapid change in the trend and pattern of the consumer goods, the rate of consumption of same products with different forms is increasing.

The last element is disposal. This refers to the process of disposing the materials thrown ways by the consumers after their consumption. However, the thrown away materials are either going in landfill or going through incinerator. However, the disposal process is emitting huge pollutants and toxic materials in the nature and with the increase in the rate of consumptions; the generation of waste is also increasing.

The impacts of the material economy system will be:

• Depletion of the natural resources will happen more quickly than it was estimated.
• Gross happiness index is reducing and it will lead to the issues such as mental stress for the people.
• Emergence of more complex diseases due to the contamination of toxic materials.
• Generation of pollution from more disposing of the consumed materials.
• Human right abuses of the workers from the under developed countries in sourcing raw materials.

Question: B2

The three components of triple bottom line approach are the people, planet and profit. People refer to the internal and external stakeholders of the company associated directly and indirectly. According to this model, it is the responsibility of the business organizations to consider the interest of all the associated stakeholders. Planet refers to the process of initiating sustainable approach for the welfare of the planet including environment and nature. Lastly, profit refers to the key organizational objective of the business organizations of gaining and maximizing profits in the market. Thus, triple bottom line approach refers to the process of considering all the aspects of sustainable business development.

Question a

OZ minerals are one of the leading gold mining companies in Australian region with having effective and extensive sustainable business operation. According to the concept of triple bottom line, one of the key performance standards that would be used by them in terms of people is safety performance standard. According to them, safety performance standard involves equipment safety standard, explosives standard and fire prevention standard. Another performance indicator in terms of people is the health and well being performance indicator. This indicator will help to measure the medical programs of the employees and occupational hazard of the employees.

In terms of the plant, OZ minerals would use environmental performance standards, which include quality of the Water resources, biodiversity standard, emissions of pollutants and rehabilitation of the closed mines. These will help them in reporting regarding welfare of the planet. In terms of profit, the performance indicators will be the measurement of the profitability of the projects and production performance. The more effective will be these indicators, the more will be the profit for the organization.

Question: B3

Greenwashing is one type of unethical business practices initiated by some of the business organizations in publicizing their sustainable approaches to the customers. This refers to the communication of misleading and amplified claims regarding any product or service by the companies compared to what actually the scenario is.

Businesses should try to avoid initiation of greenwashing due to the reason that, it is the key objective of the business organization to not practice unethical business principles. On the other hand, greenwashing is one prime example of unethical business practices. In addition, it may have negative impact on the market potentiality of the organizations due to the reason that, publicizing of the brand name in the greenwashing index will create negative word of mouth in the market. This will reduce their acceptability among the customers.

Question: B4

The impacts of the mentioned drivers are:

• Natural resources will get depleted more quickly with the increase in the average demand.
• Dumping from the developed countries to the developing and under developed countries will get increased.
• Rate of pollution will get further increased with the increase in consumption.
• Emergence of shortage of food, water and other resources.

In reducing the above discussed impacts, businesses are effective and important role to play. One of the key roles that can be played by them is the reduction of dumping of materials to the underdeveloped countries. Instead, businesses should offer new materials to these countries. Another role is to initiate sustainable development. They should initiate recycle, reuse and refurbishment in order to reduce the use of natural resources. They can also reduce their offerings in the developed countries and offer them in the developing countries. It will help in reducing the consumption in the developed countries and dumping in the developing countries.

Question b

Question: B5

According to the recent media report, Unilever opens up about their sourcing of palm oil for all their products by publishing all the documents and suppliers from whom they are sourcing the palm oil to the public. This is being done in order to enhance the transparency in the supply chain management of the palm oil. It is an important step due to the reason that, in the recent past, there are various accusations being made against the palm oil industry regarding the human right abuse and massive deforestation going on in Indonesia. Thus, in making public the supply chain of palm oil, Unilever showed that they are supporting sustainable practices in their sourcing their raw materials.

Supply chain management is important due to the reason that, majority of the materials for the contemporary business organizations is being sourced from external suppliers and thus, the sustainability approach should start from the sourcing of the raw materials. This will only help the organizations to have holistic socially responsible business practices.

PART: C

Question: C1

The key stakeholders in the given scenario are William and Timothy. For William, the ethics to be followed is at stake due to the reason that, it will be unethical for him to let use the materials from his university portal. On the other hand, for Timothy, cost is the key factor due to the reason that, it would cost more than 1000 dollars to source the marketing data required for their client, which can be easily accessible through the university portal.

Question: C2

From the point of view of William, his ethical dilemma can be justified due to the reason that, he is following the rules of his university of not using the resources in any commercial purposes. Thus, refusing to use it for Timothy will uphold his ethical practices. On the other hand, from the point of view of Timothy, she is considering the welfare of her organization by taking steps in reducing the cost involved. Thus, as an employee, it is her responsibility to look after the welfare of the organization. Thus, the behavior of both the employees is justified from their own point of view.

Question: C3

The ideal response of Timothy to William will be to communicate the duties and responsibilities of the employees to their organizations. It is to be communicated to William that though he is working as temporary intern but still he is one of the valuable internal stakeholders for the company. Thus, it is the responsibility of William to look after the welfare of the company and using the university resources will not cause ethical issues due to the reason that, these materials will not be used for any other than William. Timothy should persuade William that she is not asking him to use the university materials for other parties, rather she is asking him to use for his own purpose. This may create the perception among William that, it is his responsibilities to initiate smart work for his organization.

Question: C4

William: “What I should do in persuading Timothy that using the university materials will be unethical”? “Ok let’s recall my past experience in dealing with these types of dilemmas. Yeah I remember dealing similar incident with Richard in my high school. He asked for some confidential notes, which I have restricted by making him realize that he may face serious consequences in future if it gets publicized”. “But will Timothy agree with my views”? “Let’s see”.

William: “But let’s do one thing”. “Let me step in the shoes of Timothy in order to determine what I will do if I was in her place”. “Ok so I shall require the access to the university materials in order to save cost, but am I aware about the potential consequences”? “If university gets to know about it, then what will happen”? “Will my degree certificate get cancelled”? If someone else publicize it, then”?

William: “I think that persuading Timothy will be tough”. “Maybe she will not agree to my points at any level or she is less bothered about the future consequences”. “So I am going to face a conflict with her in this matter but still, I should be ready for it in the organization”.

William: Hi Timothy (On phone)

Timothy: Hi William

William: I need to meet up with you regarding some discussion.

Timothy: Regarding what? Is that urgent?

William: Yeah it is. I want to talk with you regarding the use of my university materials.

Timothy: So tell me in phone

William: No we should discuss in physical

Timothy: Are you unwilling to share your university details with me?

William: No not at all but there may have some potential consequences for us

Timothy: What consequences?

William: That’s why I want to meet with you

Timothy: Ok so let’s meet at 4 pm sharp

William: Sure, bye

William: I should speak my mind out to Timothy; otherwise I cannot able to convince her. Moreover, this is the time to learn about facing conflict in the organization.

At 4pm

Timothy: Hi William

William: Hi Timothy

Timothy: So tell me what you want to

William: Yeah. Actually Timothy I was thinking that, though we can use the university materials at ease but there may have certain negative consequences to be faced.

Timothy: like?

William: If the university gets to know in future in any way that we had used their data and information for commercial purposes, then what will happen? Maybe our certificate will get forfeited.

Timothy: Where will University get to know? You are not going to tell anybody.

William: No not me but they may have certain process from where they may get to know the uses of their data by their students. Or maybe they can track the download pattern of their data, from where they can determine. I am not sure though. Just discussing about the probability.

Timothy: I don’t think so

William: But if it happens, then it may incur more cost compared to what we have to incur for buying market data.

Timothy: Don’t get panic. Nothing will happen.

William: I am getting panic due to the fact that I am still studying there. I think you should think about it.

Timothy: Ok so give me today’s time. I will get back to you with this tomorrow. But still I think you are taking extra pressure.