Unit 15 And 16 Flashcards
THE GOALS OF BUSINESS:
MORE THAN MAKING MONEY – create value for society
The Triple Bottom Line: People, Planet, and Profit
Younger Workers’ Search for companies careful to the triple bottom line
The Triple Bottom Line: People, Planet, and Profit
Michelin’s Triple Bottom Line is Moving Forward:
Michelin, a French multinational tire manufacturer, is focused on producing sustainable tires and investing in its people—another company that is successfully utilizing the triple bottom line.
In considering the triple bottom line, an organization:
1.has a responsibility to its employees and to the wider community (people);
2.is committed to sustainable development (planet); and includes the costs of
pollution, worker displacement
3.has a responsibility to other factors in its financial calculations (profit)-which
are of great importance to many of today’s consumers.
In this view of corporate performance, an organization has a responsibility to its people, planet, and profit.
Success in these areas can be measured based on sustainability reporting and through a social audit.
Best Buy’s Triple Bottom Line
Best Buy isn’t only focused on revenue. Instead, it measures its success on people, planet, and profit—successfully utilizing the triple bottom line.
Balancing Multiple Responsibilities
Multiple responsibilities of business include:
Economic responsibilities; Social responsibilities and Environmental responsibilities. The challenge is to balance all three of them.
A successful firm is one which finds ways to meet each of its critical responsibilities and develops strategies to enable each obligation to be fulfilled. Sometimes these responsibilities clash and sometimes they can co-exist.
Costs and benefits must be balanced as well as short and long-term provisions.
Younger Workers’ Search FOR Meaning
Millennials (born between 1981 and 1996) and Gen Zers (born after 1997) care about the triple bottom line.
• Younger workers expect more from the organizations they work for and do business with.
• These generations want things like meaningful work and products that represent their personal values more than older generations ever did.
Internal and External Stakeholders
Managers operate in two organizational environments, both made up of various stakeholders.
• Stakeholders—the people whose interests are affected by an organization’s activities.
Internal Stakeholders
Large or small, your organization has people in it who have both an important stake in how it performs and the power to shape its future.
•Employees
•Owners
•Board of Directors
The Community of Stakeholders
Internal stakeholders are employees, owners, and the board of directors.
■ External stakeholders are in the general environment and task environment.
■ In the task environment there are customers, competitors, suppliers, distributors, allies, unions, lenders, governments, interest groups, and the media.
■ In the general environment there are economic forces, technological forces, sociocultural forces, demographic forces, political-legal forces, and international forces.
The Task Environment
The task environment consists of 10 groups that interact with the organization on a regular basis.
10 groups
The General Environment
The general environment includes six forces: economic, technological, sociocultural, demographic, political–legal, and international.
You may be able to control some forces in the task environment, but you can’t control those in the general environment.
As a manager you need to keep your eye on the distant horizon because these forces of the general environment can affect long-term plans and decisions.
The General Environment
Economic forces consist of the general economic conditions and trends—such as unemployment, interest rates, and trade balance—that may affect an organization’s performance.
Technological forces are new developments in methods for transforming resources into goods or services.
Sociocultural forces are influences and trends originating in a country’s, a society’s, or a culture’s human relationships and values that may affect an organization or industry.
Demographic forces are influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin.
Political–legal forces are changes in the way politics shape laws and laws shape the opportunities for and threats to an organization.
International forces are changes in the economic, political, legal, and technological global system that may affect an organization.
Drivers of Stakeholder Engagement
Stakeholder engagement is, at its core, a relationship
■ The participation of a business organization and at least
one stakeholder is necessary to constitute engagement
■ Engagement is most likely when both the company and its stakeholders have an urgent and important goal (a problem they want to solve), motivations for participating (or there is a need for stakeholders’ approval), and the organizational capacity to engage with one another
