Intro to IB week 11

responsible business

Businesses acting both efficiently and ethically, meeting and exceeding legal requirements, and considering their impact on people and the environment

sustainability

Meeting the needs of the present without compromising the ability of future generations to meet their needs around the world.

United Nations Sustainable Development Goals (UN SDGs)

A set of 17 goals declared by the United Nations in 2015.

human rights

Fundamental rights to which a person is entitled because they are a human being.

stakeholder

Any group or individual who can affect or is affected by the achievement of the organization’s objectives.

primary stakeholder groups

The constituents on which the firm relies for its continuous survival and prosperity. managers, employees, suppliers, customers

secondary stakeholder groups

Those who influence or affect, or are influenced or affected by, the corporation, but are not engaged in transactions with the corporation and are not essential for its survival. Trade unions

instrumental view

A view that treating stakeholders well may indirectly help financial performance.

corporate social and environmental responsibility (CSER)

Firms’ engagement with social and environmental issues in their communities

normative view

A view that firms ought to be self-motivated to ‘do it right’ because they have societal obligations.

shared value creation

An approach to CSER that focuses on activities that are good for both the firm and its stakeholders.

greenwashing

Talking about social or environmental initiatives without addressing fundamental concerns.

child labour

Working people under the age of 16.

institutional arbitrage

The practice of locating activities wherever the costs of complying with regulatory institutions are lowest.

pollution havens

Countries with lower environmental standards.

race to the bottom

Countries competing for foreign direct investment by lowering environmental standards.

labour standards

Rules for the employment of labourers including working hours, minimum pay, union representation and child labour.

footloose plants

Plants that can easily be relocated.

code of conduct (standards of engagement, code of ethics)

Written policies and standards for corporate conduct and ethics.

health, safety and environment (HSE)

A common term to cover the areas for which companies have mandatory standards.

compliance

Procedures to monitor and enforce standards for employees and suppliers.

compliance training

Mandatory training and tests designed to ensure that every employee knows the relevant codes of conduct.

explicit CSER

Voluntarily assuming responsibilities of societal concerns.

philanthropy

Donations for purposes that benefit the wider society.

implicit CSER

Participating in the wider formal and informal institutions for society’s interests and concerns.

hypernorms

Norms considered valid anywhere in the world.

defensive strategy

A strategy that focuses on regulatory compliance with little top management commitment to CSER causes.

accommodative strategy

A strategy that is characterized by some support from top managers, who may increasingly view CSER as a worthwhile endeavour.

proactive strategy

A strategy that endeavours to do more than is required in CSER.