Group 7 (Check course groups in BREO)

Tutor: Paula Cloonan ([email protected])

BSS064-6
Business Sustainability and The Role of HR
(LMOR)
Challenge Question:

What do we mean by business ethics?

 Session Outline/ Objectives

 To embed learning of Social Responsibility/ The Doughnut Economy

 The Link to Prior Learning – Assessment Activity

 Plenary/ Opportunity to ask questions

 Social Responsibility of Business

Small Group Discussion

Milton Friedman (USA – Chicago School of Business)

The Social Responsibility of Business is to Increase Its Profits".

… a company has no social responsibility to the public or society;
its only responsibility is to its shareholders.

Timing: 5mins
Introduce yourself briefly and discuss the question based on the statement
Try to agree and disagree, before forming your opinion. Challenge each other.
Task:
Watch the TEDx Talk on The Social Responsibility of Business
What are the key points raised?

https://www.youtube.com/watch?v=Z5KZhm19EO0
18 minutes

If you cannot see it or hear it, put the link in your browser. We will review it in 20 minutes.

Alex Edmans
London Business School
 The Social Responsibility of Business
What were the key points from the Ted Talk?

Why do businesses exist?

 Corporate Social Responsibility

 Corporate social responsibility deals with the theory that organizations and their employees
should partake in activities and initiatives that benefit society at large. Corporations that
engage in social responsibility (CSR) often have employees who are motivated and more
likely to be productive. In addition, when a company has a commitment toward social
responsibility, it resonates with the employees, who also take on a more positive role when it
comes to individual and organizational responsibility.
 The Social Responsibility of Business
 Business is naturally caring: it makes good products to satisfy it’s customers
 It keep workers happy to retain them
 If it damages the planet, it’s brand is hurt
 Former Chairman of Marks and Spencer, Simon Marks ‘Reduced priced meals
for staff’
 George Merck, President of Merck Pharmaceuticals, invented penicillin. Shared
the secrets of how to make it with competitors.
 Focus on Social Responsibility and profits will follow
 You cannot measure the bottom line
 Social Responsible Companies perform better: (1 element)
100 best companies to work for in USA
 Businesses exist to serve a purpose and only by doing so will they
make long-term profit
 Triple Bottom Line

This links to corporate governance and

corporate finance.

 TBL theory holds that if a firm looks at profits only, ignoring people and the
planet, it cannot account for the full cost of doing business
 A challenge to this approach is that is is difficult to measure TBL
Ethics

What is it about?
 ethics is concerned with how individuals apply moral
values and codes when faced with an ethical dilemma
Why bother?
• for organizations: huge cost in terms of finance and
reputation
• for individual managers: facing ethical dilemmas is
common, so they need to understand the ‘cause of things’
and how to act upon them
Meaning of Ethics

 Ethics as study of right and wrong

 Ethics as a set of rules or code of conduct

 Guidance in answering the question ‘What should I do?’

 Ethical questions in organisations
 Customers – product quality and safety:
– pricing policies - advertising
 Communities – pollution:

– physical environment - closure of operations 

 Government – compliance with legislation:

– implementation of regulations - tax returns  

 Shareholders – honesty:

– providing a return 
 Other organisations – act honestly and fairly:

– honour contracts
 Challenge Question Discussion:

What do we mean by business ethics?

Business ethics refers to the standards for morally right and wrong conduct in business.
Law partially defines the conduct, but “legal” and “ethical” aren’t necessarily the same.
Business ethics enhances the law by outlining acceptable behaviours beyond government
control.

Corporations establish business ethics to promote integrity among their employees and
gain trust from key stakeholders, such as investors and consumers.

• Business ethics drives employee behaviour

• Business ethics benefits the bottom line
Doughnut Economics/ ‘The New role for HR following the
Covid-19 Pandemic’
 Objective 3:
To embed learning of Social Responsibility/ The Doughnut Economy

Small Group Discussion

TASK: Read the article – The Doughnut Economy

What is the ‘Doughnut Economy’?

What were the main points made about HR in the article?
What are your recommendations for the role of HR?
How can these ideas be implemented in an organisation?

Timing: 20 minutes
Discuss the question based on the article ‘The New role for HR following the Covid-19 Pandemic’.
Feedback to the group
‘The New role for HR following the Covid-19 Pandemic’
The model suggests that we should focus our energies on ensuring that the world and its people
live within the boundaries of the Doughnut.
 ‘The New role for HR following the Covid-19 Pandemic’
– Key Principles
 Pre-covid of responsibility of HR to focus on cost control and shareholder return
could this be a catalyst for change?
 ‘Neoliberalism’ outlook in the world ‘everyone benefits’ from successful economies
 Now is the time for HR professionals to re-assert their leadership to create
sustainability for organisations and their people
 Covid – Evidence of Inequality
People being put on furlough or ‘fired’
People losing jobs are the lowest paid workers
Socially deprived more likely to catch covid
 Covid – Evidence of Changing Mindset
Appreciation of key workers
Togetherness
Innovation and togetherness
 ‘The New role for HR following the Covid-19 Pandemic’
Applying Doughnut to business:
 Structure the business so it has a positive effect on boundaries and protects its stakeholders.
 Define and communicate the purpose of the business and the values. Ensure everyone has these as their
mantra.
 Have a plan for cash and source of funds that is diverse with providers who are willing to play the long game
with the company.
 Build powerful internal and external networks.
 Make sure everyone in the business and its supply chain is paid enough so they do not go to bed at night
worrying about how they will pay their bills.
 Fair payment of taxes
 Encourage employee ownership of the business and ensure that the balance of ownership does not distract
from the purpose and values of the business – even when times are tough.
 Make your business distributive and regenerative by design – it is planned into the business design how value
will spread to all stakeholders and in the product life cycle there is no waste.
Assessment – Week 1
Critical analysis and discussion of Corporate Governance and Sustainability in the context
of contemporary organisations

In The Following Format:

 Professional email to a work colleague

 What the main features?

 Assessment – Week 1
• Subject line:
For example: how to enhance corporate governance addressing the needs of multiple
stakeholders?
• Introduction and Purpose of the email, presenting an evidence-based argument,
convincing the recipients
• Critical analysis and evaluation, including in-text citations to quality academic and
practitioner references to support your argument on corporate governance and can
focus on a couple of topics
• Conclusion of main arguments/analysis
• Recommendations – Options/Choices
Assessment – Week 1 Requirements

 Email format
(Subject line/ To From)

 Professional style
(Add positions in the company)

 Academic content
Theory (In-text citations)
Evidence
Theoretical Area Theory/ Evidence
Corporate Governance Agency Theory
Stewardship
Stakeholder Theory

Finance/ Sustainability Triple Bottom Line

Sustainability Corporate Social Responsibility

Alex Edmunds/ TedTalks

Doughnut Economics/ HR Directorate

Task:
What can you find out about these theories?
 Assessment – Week 1 Requirements

Open your online journal.

Either write your notes or write your professional email.

 Session Outline/ Objectives Review

 To embed learning of Social Responsibility/ The Doughnut Economy

 The Link to Prior Learning – Assessment Activity

 Plenary/ Opportunity to ask questions

 Useful Additional Reading

 CIPD (2013) The role of hr in corporate responsibility. London:

CIPD
 Li, W., Young, S. (2016) An analysis of CEO pay arrangements
& value creation for FTSE-350 companies. London: CFA
 CIPD (2020) Good work index (survey). London: CIPD