Firstly, it can impact at the company level and secondly at the ethical portfolio level. There are several ways through which ethical behaviour/investment of the company could indirectly affect the organizational performance. CHAPTER 4: CONCLUSION • Ethical investment is not only concerned with the investors but the organization as well as to how it invests within the organization for the functioning of various internal activities as well as investment externally. • Ethical investment has an effect on the organizational performance and the brand image of the company. • Not investing much of the time on responsible investment could get the company through in the short run but for long run sustainability of the organization which is on social, financial, ecological and political basis responsible investment is suggestable for the organization.
However, the company clearly has violated the code of conduct which it has done the opposite of what has been stated in the code of conduct. Question 4: Determine why MNCs such as Coca Cola are increasingly addressing their social and environmental impacts? As stated by Hubert Patricot Social issues and environmental issues are the main focus of their sustainability plan which includes the way they report their progress and outcomes and set their aims/goals. Engaging with their stakeholders on issues that concern them derived improved performance, greater employee engagement, and stronger connections locally. Also stated by John Brock “Forward-thinking businesses will be able to turn the societal and environmental challenges we face into an opportunity”.
The next common theory that used by prior researcher in finding the motivations of company in providing environmental reporting is the stakeholder theory. Ulman (1985) focuses on two categories of stakeholder theory which comprise of stakeholder accountability and stakeholder management. In general, stakeholder is said to manage the relationship of company and the stakeholders rather than being accountability. There are also some researchers that stated stakeholder theory as the market-based theory in a way that stakeholders have the power and are the resources of the factors that contribute companies to provide environmental disclosure. Stakeholder theory helps company in strengthening the relationship with stakeholder groups as company is
4. POSITIVE IMPACTS The woes of the Deepwater Horizon oil spill have been heavily associated to BP, and the known risks related with the oil industry was highlighted more prominently. Nonetheless, BP has been developing and shaping its global image with implementation of a series of corporate social efforts based on its core values and code of conducts throughout the years. Environmental contributions Over the years, BP has initiated several movements in improving resource sustainability and supporting communities with alternate energies. BP launched its Alternative Energy Business in 2005 with the emphasis that ‘going green’ is of increasing importance to its firm and industry, while aiming to expand it further when it becomes more profitable to do so.
A business’ ethical responsibility clarifies the principles, norms or expectations that have to deal with the employees, consumers or the host community affected by a business’ activity. Carroll expresses the importance for a corporation to adjust to their host community. The actual societal and ethical customs of the given host may in fact go beyond what is at present required by law – making it vital to know that the corporate integrity and ethical conduct may possibly go beyond law and regulations of the given host country (Ibid: 42). In the case of MNCs, this type of situation can happen when conducting business in a country where its legal systems are non-functioning and likely suffers from oppressed regimes and corrupted government officials
Climate change has been raised as a problem both on the domestic and international levels in the United States, and Green Theory can be used to help explain this growth in awareness. This has led to programs such as the Environmental Protection Agency sponsored Clean Air Act, which determined that carbon-dioxide and greenhouse gases were harming the general public. Policies such as the Clean Air Act although it mainly focuses on the wellbeing for humans would still fall under the concept of Green Theory for it is considered a governmental approach to the environment or the non-human resources and falls under the pillar of taking
(Premeaux 2004) In the context of business, rules are like visions, missions, and compliances for employees to follow throughout their work. Taking for example, manufacturing organization claims to produce products which are environmentally friendly. In order to meet with the demand, organization suggested to purchase a fast production machine with the downside of producing high amounts of emission. If the decision maker is guided by rule utilitarianism, he or she reject the idea since social health is at risk not following the claim of being environmentally friendly. In addition, this also reduces the chances of whistle-blowing abolishing the organisation reputation.
In this essay the author will discuss about the significance of ethical leadership and transition in manager’s role in 21st century. Both the primary and secondary stakeholders are demanding sustainable business practices from the business leaders. The sustainability can be defined as meeting the needs of present without comprising with the future needs. The word “sustainability” is not limited to environmental problems. The managers need to think about economic performance, social responsibility and environmental problems.
Firms which are managing environmental affairs their relations with consumers, vendors, regulators, and other industries are increasing and improving their sustainability to the success. The environmental strategies include developing green business, divesting environmental-damaging business, Struggle to become low cost producer, through energy conservation and waste minimization, and implementing different strategy through green product features. The firms can include environmental representative in their board of directors, announce bonus for the favorable environmental results, establish environmental oriented objectives, include environmental values in mission statements, and provide environmental training program for firm managers and employees. WHY FIRMS SHOULD “BE GREEN” The consumers now demand for the products which are environmentally safe and having high packaging. Firms can be protect the natural environment demand by the public.
It is argued that ‘the goals of the sustainability team and financial team are not well aligned’ (WRI, 2013:3), and as a result they make decisions and evaluate success in different ways. This paper explores the link between resource commitment, the capability building processes and legitimacy enhancement. The enhancement of legitimacy allows increasing levels of resource commitment and consequently of capability building (Arevalo, Castello, De Colle, Lenssen, Neumann & Zollo, 2011). This dissertation argues for two types of legitimacy measures. Firstly, the adoption of corporate codes of conduct, to indicate organisational congruence with societal expectations.