Hello!

• Dr. Amit Srivastava (PhD, IIT Delhi)

• Chairperson, Strategy & General Management, TAPMI

• Academic Service: IIM Ahmedabad, IIFT Delhi, IIMK, Jiwaji

University, Bradford University, others
• Professional Service: ASSOCHAM Delhi, HPCL, Hero Honda,
Delhi Metro, Ministry of Health (GOI and Bihar), WHO,
Engineers India Limited, NTPC, MUTBI, Ministry of Science and
Technology, GOI.
• Passion for Strategic Thinking, Literature from Ghalib to
Gulzar, Astronomy
Google Scholar: https://scholar.google.co.in/citations?user=OAHQgisAAAAJ&hl=en
LinkedIn: https://in.linkedin.com/in/amit-srivastava-a1aa0310
Instagram (just joined): https://www.instagram.com/sriamitsri/
SUSTAINABILITY,
RESPONSIBILITY
AND
MANAGERIAL
ETHICS
Prof. Amit Srivastava
SUSTAINABILITY
and BUSINESS:
What YOU
THINK?
 SRME: Course Objectives
To impart knowledge about the To develop critical thinking skills
three core areas of responsible through the application of
management viz. sustainability, concepts of sustainability in all
responsibility and managerial
business domains.
ethics.

To understand of
interlinkages of sustainability To examine the ethical
with various management implications of business practices
functions. from a stakeholder perspective.
 SRME: Learning Outcomes
CLO 1: Demonstrate awareness and CLO 2: Create solutions that
assess the impact of sustainability, ameliorate the possible impact in a
responsibility and ethical business manner that optimizes stakeholder
practice on firm performance (PLG value (PLG 2)
1)

CLO 4: Identify ethical and CLO 3: Demonstrate ability to

sustainability imperatives; appraise integrate the knowledge among
and anticipate the impact on the various functional areas such as
overall goal architecture of the marketing, accounting, economics
enterprise in question (PLG 5) etc. (PLG 3)
COURSE CONTENT: 3
MODULES

1. Sustainability: Managing for the

triple bottom line.

2. Responsible Management:
Optimizing stakeholder value

3. Managerial Ethics: Managing

for Moral Excellence
7
ASSESSMENT SCHEME
Evaluation Weightage (%) Duration (in minutes) Open/close Book CLO Tested
End Term Exam
50 90 Closed Book CLO 4

Unit of
S. No. Evaluation Item Weight Time CLO
Evaluation

1 Quiz Individual 20% After 12th Session CLO1

2 Presentation Individual 25% After 15th Session CLO 3

Class Throughout the

3 Individual 5% CLO 2
Participation sessions
 DELIVERABLES

• KNOWLEDGE
• COMPETENCE
• ATTITUDE
• EXPERIENCE
 SRME Course: Reading Materials
1. UN 1987: Report of the World Commission on environment and development-
2. Lubin, D. A., & Esty, D. C. (2010). The sustainability imperative. Harvard business review, 88(5), 42-50.- R1005A-
PDF-ENG
3. The triple bottom line: What is it and how does it work. Indiana business review, 86(1), 4-8. Slaper, T. F., & Hall, T.
J. (2011).
4. Henderson, R, Reinert S, Oseguera M (2020). Climate change in 2020-implications for business-Harvard Business
School - 320087-PDF-ENG
5. Tse, T., Esposito, M., & Soufani, K. (2016). How businesses can support a circular economy. Harvard Business
Review. Retrieved April, 30, 2016.
6. Michael W. Toffel, Stephanie van Sice (2013) Carbon footprints - methods and calculations- Harvard Business
School- 611075-PDF-ENG
7. Joyce, A., & Paquin, R. L. (2016). The triple layered business model canvas: A tool to design more sustainable
business models. Journal of cleaner production, 135, 1474-1486.
8. Laasch, O. & Conaway, R. (2016). Chapter-4 (PPT) –Responsibility- Responsible Business: The Textbook for
Management Learning, Competence and Innovation.
9. Waddock, S., Rasche, A., Werhane, P. H., & Unruh, G. (2010). The principles for responsible management
education. Towards assessing business ethics education, 13-28
10. Simon Zadek (2004) Path to Corporate Responsibility- Harvard Business Review- R0412J-PDF-ENG
 SRME Course: Reading Materials
11. Porter, M. E., & Kramer, M. R. (2011). Creating Shared Value: Harvard Business Review. Jan-Feb, 2011, 1-
17.
12. Kramer and Pfizer (2016) The ecosystem of shared value- Harvard Business Review- R1610G-PDF-ENG
13. Martin, R. L., & Osberg, S. R. (2015). Two keys to sustainable social enterprise. Harvard Business Review,
93(5), 86-+. R1505G-PDF-ENG
14. Ethics and Ethical decision making framework by Hartman and Werhane
15. Bazerman, M. H. (2020). A New Model for Ethical Leadership. Harvard Business Review, 98(5), 90-97.-
R2005G-PDF-ENG
16. Gardner, H. (2007). The ethical mind. A conversation with psychologist Howard Gardner. Harvard Business
Review, 85(3), 51-6.- R0703B-PDF-ENG
17. Desai Mihir (2017). Finance can be a Nobel Profession (Yes, Really) Harvard Business Review, H03RW1-
PDF-ENG
18. Beena Ammanath, Reid Blackman (2021). Everyone in Your Organization Needs to Understand AI Ethics-
Harvard Business Review- H06HJM-PDF-ENG
19. Taylor Alison (2017). 5 Signs Your Organization Might Be Headed for an Ethics Scandal. Harvard Business
Review, H042S8-PDF-ENG
20. John W. Mullins (2004) Take the Money--or Run – Harvard Business Review- R0411X-PDF-ENG
Most Important !

DO YOUR
HOMEWORK
Most Important !

CONTRIBUTE in
CLASS DISCUSSION
1
MODULE

SUSTAINABILITY
SUSTAINABILITY AND BUSINESS: In Practice
SUSTAINABILITY
In 1987, the United Nations Brundtland Commission
defined sustainability as*:

“Meeting the needs of the present without compromising the

ability of future generations to meet their own needs”.

*Brundtland, G. H. (1985). World commission on environment and development. Environmental policy and
law, 14(1), 26-30.
 ‘Sustainable Development meets the needs of
the present, without compromising the needs
of future generations’- UN Brundtland Report

DEFINING • Implies Inter-generational justice, i.e., the idea that what

we do today must meet both our needs and not interfere
SUSTAINABILITY with the needs of coming generations.

Sustainable Development is fundamentally

about recognizing, understanding and acting
on interconnections – above all those between
the economy, society and natural environment.
It is about seeing the whole picture.
 EVENT DATE

United Nations’ Conference on The Human Environment, 1972

Stockholm

Definition of sustainable development through smaller 1982

sets – UN

Rio Earth Summit – RDED, Agenda 21, CBD 1987

INSTITUTIONALIZATION
OF SUSTAINABILITY Foundation of World Business Council for Sustainable 1990
Development

Kyoto Protocol 1997

Global Reporting Initiative – sustainability reporting 1999

guidelines

MDGs 2005
 Why Sustainability has not been Sustaining

Why do companies usually not have over- arching vision or plan of sustainability?*
1. Because they don’t see sustainability as a strategic issue? OR
2. Because they are facing an unprecedented journey for which there is no road map?

Is sustainability predictable?
> Business megatrends shape the competitive landscape – steam engine, railroads,
electrification, mass production, telecommunication, microelectronics and IT, etc.
➢ Business megatrends have features and trajectories in common**.
➢ Sustainability is a megatrend and is predictable to some extent**.

*Lubin, D. A., & Esty, D. C. (2010). The sustainability imperative. Harvard Business Review, 88(5), 42-50.
**John Naisbitt popularized the term, megatrends - referring to incipient societal and economic shifts such as globalization, the
rise of the information society, and the move from hierarchical organizations to networks.
**John Naisbitt (1982). Megatrends: Ten New Directions Transforming Our Lives. Warner Books.
MEGATRENDS
ANALYTICAL TOOL: Megatrends Prediction Indicators

◎ Global Impact: Global competition of resources (e.g. Oil) – geopolitical dimensions.

◎ Externalities: Issues (e.g. CO2 emissions)becoming central to a firm’s performance
and stakeholders expect companies to share information about them.

◎ Escalation: Escalate public and governmental concerns.

◎ Strategic Innovation: Strategic innovation around megatrends (e.g., sustainability -
energy efficiency, renewable power, resource productivity, and pollution control.

◎ Managers can no longer afford to ignore sustainability as a central factor in their

companies’ long- term competitiveness.
 Analytical Framework: Staged-Framework of
Sustainability Vision Setting and Execution
• The megatrends show that firms seeking to gain advantage in sustainability will have to solve
two problems simultaneously:

Getting the Vision Right: Vision for value creation (four-stage value creation)
• Stage 1: Do old things in new ways
• Stage 2: Do new things in new ways
• Stage 3: Transform core business
• Stage 4: New business model creation and differentiation

Getting Execution Right: capturing the value

• Leadership
• Methods for assessing value
• Strategy development
• Management integration
• Reporting and communication
Analytical Framework:
Competitive Advantage
from Sustainability
Lubin, D. A., & Esty, D. C. (2010). The sustainability
imperative. Harvard Business Review, 88(5), 42-50.
SUSTAINABILITY and BUSINESS: In
Practice
• Business Report: “Making sustainability a corporate priority” by V Rishi Kumar,
Business Line, July 11, 2021. Available at:
https://www.thehindubusinessline.com/specials/clean-tech/making-sustainability-
a-corporate-priority/article35266380.ece Retrieved on: July 24, 2021.

• Business Report: Flipkart, Myntra partner with Canopy to advance sustainability

efforts, conserve forests. The Indian Express, July 22, 2021. Available at:
https://www.newindianexpress.com/business/2021/jul/22/flipkart-myntra-partner-
with-canopy-to-advance-sustainability-efforts-conserve-forests-2333744.html
Retrieved on: July 24, 2021.
 • Concept and thinking of sustainability
and why it is important.
Learnings
• Megatrends, its Analytical Indicators, and
Predicting the megatrends and Lessons
& for Strategizing and Planning

• Staged-Framework of Sustainability
Vision Setting and Execution.
Take Away
• Competitive Advantage From
Sustainability: Analytical Framework
SUSTAINABILITY and BUSINESS:
Learning Resources Used
1. Brundtland, G. H. (1985). World commission on environment and development. Environmental policy and
law, 14(1), 26-30.
2. Lubin, D. A., & Esty, D. C. (2010). The sustainability imperative. Harvard Business Review, 88(5), 42-50.
3. Sachs, J. D. (2012). From millennium development goals to sustainable development goals. The
lancet, 379(9832), 2206-2211.
4. Video 1: What is sustainability by UCLA Posted, April 14, 2021. Available at:
https://www.youtube.com/watch?v=zx04Kl8y4dE Retrieved on: June 20, 2021.
5. Video 2: The future of food may be crickets and worms | CNBC Reports, Sep 8, 2017. Available at:
https://www.youtube.com/watch?v=fDWeR-kiSeU Retrieved on: July 5, 2021.
6. Business Reports / News: “Making sustainability a corporate priority” by V Rishi Kumar, Business Line,
July 11, 2021. Available at: https://www.thehindubusinessline.com/specials/clean-tech/making-
sustainability-a-corporate-priority/article35266380.ece Retrieved on: July 24, 2021.
7. Business Reports / News: Flipkart, Myntra partner with Canopy to advance sustainability efforts, conserve
forests. The Indian Express, July 22, 2021. Available at:
https://www.newindianexpress.com/business/2021/jul/22/flipkart-myntra-partner-with-canopy-to-advance-
sustainability-efforts-conserve-forests-2333744.html Retrieved on: July 24, 2021.
SUSTAINABILITY and BUSINESS:
Learning Resources
Other Useful Learning Resources
• Bansal, P. (2005). Evolving sustainably: A longitudinal study of corporate sustainable
development. Strategic management journal, 26(3), 197-218.
• Hawn, O., Chatterji, A. K., & Mitchell, W. (2018). Do investors actually value sustainability? New evidence
from investor reactions to the Dow Jones Sustainability Index (DJSI). Strategic Management Journal, 39(4),
949-976.
• Mireia Torello Raventos, Mike Rosenberg (2017). Industry and background Note on Business and
Sustainable Development Goals. Harvard Business School Publishing, Product Number IES637-PDF-ENG.
1 Session

Impact Assessment, Triple

Bottom Line and Climate Change and
Business
CLIMATE CHANGE & GREENHOUSE: What YOU THINK?
 Greenhouse Effect
• Greenhouse Gases: include water vapour, carbon dioxide, methane, nitrous oxide, ozone
and some artificial chemicals such as chlorofluorocarbons (CFCs).

• Greenhouse effect: is a natural process that warms the Earth’s surface.

• When the Sun’s energy reaches the Earth’s atmosphere, some of it is reflected back to
space and the rest is absorbed and re-radiated by greenhouse gases.

• The absorbed energy warms the atmosphere and the surface of the Earth.

• This process maintains the Earth’s temperature at around 33 degrees Celsius warmer
than it would otherwise be, allowing life on Earth to exist.

• Enhanced greenhouse effect: Human activities – particularly burning fossil fuels (coal, oil
and natural gas), agriculture and land clearing – are increasing the concentrations of
greenhouse gases and, therefore, contributing to warming of the Earth.
Greenhouse Effect
 Earth's
Climate
Is
Warming

Source: Global Climate Change: https://climate.nasa.gov/scientific-consensus/

Triple Bottom Line APPROACH
 • John Elkington strove to measure sustainability during the mid-
1990s to measure performance in corporate America –
• Triple Bottom Line (TBL) Framework

The • Goes beyond the traditional measures of profits, ROI, and

shareholder value to include environmental & social dimensions.
Tiple
Bottom • Develop comprehensive investment results - performance along
the interrelated dimensions of profits, people and the planet -
Line TBL reporting as a tool to support sustainability goals.

• Interest in triple bottom line accounting has been growing across

for-profit, nonprofit and government sectors.
 • Personal Income

TBL: • Cost of underemployment

• Job growth

ECONOMIC • Revenue by sector

BOTTOM • Employment distribution by sector
LINE • Sector revenues vs sector
employment (agriculture in India)
 • Fossil fuel consumption
• Solid waste management
TBL:
• Hazardous waste management

ENVIRONMENTAL • Change in land cover usage

BOTTOM • Emission amount and quality

LINE • Sustainability reports of resources

• Materialist assessments
 • Unemployment Rate
TBL: • Female Labour Force Participation
• Median Household Income
SOCIAL • Relative Poverty
BOTTOM • Quality of Life
LINE • Health-adjusted Life Expectancy
Economic
• Amount of taxes paid

Social
• Average hours of training/employee
• From welfare to career retention TBL
• Charitable contributions
Scorecard
Environmental/Safety
• Safety incident rate Reporting
• Lost/restricted workday rate
• Sales dollars per kilowatt hours
• Greenhouse gas emissions
• Use of post-consumer and industrial recycled material
• Water consumption
• Amount of waste to landfill
ESG and IMPACT ASSESSMENT
 ESG Framework of SUSTAINABILITY
Social Capital:
• Individual Human Capital including Knowledge, Skills, Values, Physical Health and personal well-being
• Human Capital born of interaction inside and between groups of humans such as joint values, culture and
collective welfare
Environmental (Natural) Capital:
• Quantitative stock of renewable and non-renewable resources including value generated by use / consumption
of these resources
• Qualitative assessment of resilience of eco-systems and richness of connections represented by high bio-
diversity

Economic Capital (Attributable to individual / organisations / whole economic eco-system):

• Tangible assets such as machines and production facilities, intangibles such as customer loyalty, brand value and
financial resources, such as cash flows.
• Qualitative aspects such as stability of a company or the whole eco-system
Sustainability: Corporate Metamorphosis (John Elkington)

Low impact High impact

Regenerative Butterflies Honeybees

(increasing
returns)

Degenerative
(decreasing
returns) Caterpillars Locusts
 DFID PHYSICAL
CAPITAL

SUSTAINABLE
LIVELIHOODS FINANCIAL NATURAL
CAPITAL CAPITAL
FRAMEWORK SUSTAINABLE
LIVELIHOODS
FRAMEWORK

SOCIAL HUMAN
CAPITAL CAPITAL
 STEP 1 GET LEAN - Reduce

OECD GET SMART – Use new data for new

STEP 2 markets

GREEN
RECOVERY GET CREATIVE – Product/ Process/
STEP 3 System
FRAMEWORK
GET ENGAGED – Stakeholder
STEP 4 Involvement
 Concepts / Theory

1. Impact Assessment
2. ESG Framework
3. Climate Change and Greenhouse Effect
Key 4. DIFD Sustainable livelihood
Learnings Framework

and Analytical Framework/Tool

Take Away
1. Tiple Bottom Line Framework
2. Triple Bottom Line Scorecard and
Reporting
3. Corporate Metamorphosis
4. OECD Green recovery Framework
1 Session

Circular Economy
and
Sustainable Business Model
Canvas
Carbon Footprint and Circular Economy: In Practice
 • The natural resources are become scarcer and more
expensive.

How
Business • Circular supply chain would help make processes, such as
product design, procurement, and waste management, more
Can efficient and productive.
Support the • Three ways businesses can start:
Circular • 1) recycle more and better,
Economy* • 2) rent goods, and
• 3) lengthen the longevity of products.

*Tse, T., Esposito, M., & Soufani, K. (2016). How businesses can support a circular economy. Harvard
Business Review. Retrieved April, 30, 2016.
1. Recycling: Two main forms of recycling: Closed and Open loop

• Closed loop: reusing materials such as glass, steel, and aluminium that can be
recycled continually.

• Open loop (downcycling): considering that materials (e.g. paper) downgrade to lower
quality with each recycling - either only recycle materials that won’t deteriorate over
time or extending the lifespan of materials before recycling them.

• Dell: Plastics lose their inherent value after each recycling (so less reusable over time).
• Dell partnered with Wistron GreenTech to prevent plastics from deteriorating more
recycling possible.
• Saves cost to company and reduces carbon (so the brand and possible tax benefits)
2. Rent instead of sell: renting or leasing the products to the customers rather selling.

• Servitization: Selling the use of goods instead of the goods themselves.

• Renault’s electric cars – instead of selling the batteries, it leases them to customers.
• This means that when the batteries no longer work, the manufacturer can re-engineer or
recycle them for future use.

3. Offer ways to lengthen and widen the use of products: Remanufacturing to extend
the longevity of the products, which can then be re-utilized for secondary or emerging
markets.

• UK-based Fonebank – buy old smart phones to refurbish them and sell.
• Apple, too, sells refurbished products for a cheaper price.
Renault

• Recovers 43% of car parts for remanufacturing.

• Annually, it now refurbishes 30,000 engines,

20,000 gearboxes, and 16,000 fuel injection
systems.

• Result: parts are 30 to 50% cheaper for customers,

and save 80% more energy, water, chemical
products, and waste.
SUSTAINABLE
BUSINESS
MODEL
CANVAS
 Business Model

Who is the customer?

“A business model is a
representation of how
What does the customer value? an organization makes
Peter
Drucker’s (or intends to make)
questions money.”
, How do we make money in this
business?

What is the underlying economic

logic that explains how we can
deliver value to customers at an
appropriate cost?
56
Business Model Canvas
[Alexander Osterwalder]
 • Customer Segment
• Value Proposition
• Channels (communication, distribution & sales)
BMC – • Customer Relationship
BUILDING • Revenue Stream
BLOCKS • Key Resources
• Key Activities
• Key Partnerships
• Cost Structure
 • Incorporate Triple Bottom Line to the BMC

• Analysis
• Current and future economic and legal
Sustainable challenges such as compliances and its impact
on product design, cost structures and revenue
Business • Current and future environmental challenges
including availability of basic resources and costs
Model for the same
• Current and future social challenges impacting
Canvas labour force and customer requirements

• Integrates the relationship between these

three variables and the BMC
https://www.case-ka.eu/wp/wp-content/uploads/2017/05/SustainableBusinessModelCanvas_highresolution.jpg
 • Impressive statement- Why should you
buy?

1. Value • Can give you an advantage over your

proposition competitors and is often what your
prospects use to evaluate you.

• Examples
• Apple iPhone
• MacBook - Light Years ahead
2. Customers
(Segment)

Who are my
customers?
3. Channels - Distribution Channels

• Physical channel-
Physical store
• Distributor/
Retailer
• Online/ virtual
channel
• Combinations
4. Customer relationship • How do I keep my
customers?

• How do I grow
customers?

• How do I retain
my customers?
5. Revenue streams • Revenue=
Price*Quantity

• As per use/
subscription

• Pricing Strategy
6. Key Resources • Assets

• Human
Resources

• Manufacturing
machinery
7. Partners
• Key partners-
suppliers/
NGO/ Govt./
other
companies
8. Key activities • Which are
important
activities?

• Require more
attention-
procurement of
niche products
9. Cost Structure
• Fixed cost

• Variable cost

• Budget
10. Beneficiaries
• Who all will get
benefit of this
business?

• Government
• Society
• Consumers
11. Benefits

• Outcomes and
benefits
 • What ecological or social cost is our business
model causing?
12. • Which key resources are non-renewable?
Eco-Social
Cost • Which key activities uses a lot of recourses?

Evaluation Instruments:
• Life-Cycle Assessment (of products &
services)
• Common Good Balance Sheet
 • What ecological or social benefits is our
business model is generating?
• Who are the beneficiaries? Are they potential
customers?
13. • Can we transform the benefits into a Value
Eco-Social Proposition? If yes, for whom?
Benefits

Instruments:

• Social Reporting Standard

• Common Good Balance Sheet
1 Session

Responsible Business
WHOM ARE WE RESPONSIBLE
TO?
STAKEHOLDERS INTERESTS INFLUENCE
Can rate their influence on
decision-maker (1-5)
SHAREHOLDERS Profit & Growth, Dividends Election of Board

CUSTOMERS Quality, value for money, customer service Revenue, loyalty and goodwill

LENDERS Maintain Credit Discipline and Repayment Withdrawal of banking facilities,

liquidation of securities

GOVERNMENT Taxes, economic growth and legal operations Regulations, subsidies and taxation

EMPLOYEES Job security, economic growth, safe working Turnover, employee morale
conditions, satisfaction

COMMUNITY Local impact, jobs, protection of the immediate Opinion leaders and sharing of
environment resources
Responsible Management Debate
 Stages of Responsible Management
STAGE WHAT orGANIZaTIONS DO WHY THEY DO IT
DEFENSIVE Deny practices, outcomes, or To defend against attacks to their reputation that in the short
responsibilities term could affect sales, recruitment, productivity, and the brand
COMPLIANCE Adopt a policy-based To mitigate the erosion of economic value in the medium term
compliance approach as a cost because of ongoing reputation and litigation Risks.
of doing Business

MANAGERIAL Embed the societal issue in To mitigate the erosion of economic value in the medium term and
their core management to achieve longer-term gains by integrating responsible business
processes practices into their daily operations
STRATEGIC Integrate the societal issue To enhance economic value in the long term and to gain first-
into their core business mover advantage by aligning strategy and process innovations with
strategies the societal issue
CIVIL Promote broad industry To enhance long-term economic value by overcoming any first-
participation in corporate mover disadvantages and to realize gains through collective action
Responsibility

Source: S Zadek (2002). The Path to Corporate Responsibility, Harvard Business Review.
 The Four Stages of Issue Maturity
Stage Characteristics
latent • Activist communities and NGOs are aware of the societal issue.
• There is weak scientific or other hard evidence.
• The issue is largely ignored or dismissed by the business community.
emerging • There is political and media awareness of the societal issue.
• There is an emerging body of research, but data are still weak.
• Leading businesses experiment with approaches to dealing with the issue.
consolidating • There is an emerging body of business practices around the societal issue.
• Sector-wide and issue-based voluntary initiatives are established.
• There is litigation and an increasing view of the need for legislation.
• Voluntary standards are developed, and collective action occurs.

institutionalized • Legislation or business norms are established.

• The embedded practices become a normal part of a business-excellence model.

Source: S Zadek (2002). The Path to Corporate Responsibility, Harvard Business Review.
 Organizational / Management Response
High
Opportunity
Civil Zone

Strategic
Organizational
Learning
Managerial

Compliance

Defensive Risky Red Zone

Latent Emerging Consolidating Institutionalized

issue maturing

Source: S Zadek (2002). The Path to Corporate Responsibility, Harvard Business Review.
 Which category of responsibility is
fulfilled by the company –
economic, legal, ethical or
discretionary?

How does the company respond to

ASSESSING stakeholders’ concerns/ claims?

RESPONSIBLE
BUSINESS How mature are the issues that the
company addresses?

How imbedded are the

stakeholders’ issues in the
organisation’s systems?
 • Which groups are dependent
DEPENDENCY on org’s products/ services/
actions?

• To whom does the org have a

RESPONSIBILITY legal/ ethical/ commercial/
operational responsibility? MAPPING
STAKEHOLDERS
TENSION • Which group needs immediate
attention from the org?
- ACTIVITY

• Which group has maximum

INFLUENCE influence on the org’s
decisions?
Corporate Social Responsibility

and

Corporate Shared Values

Walk Fast or Far: CSR and Strategy
Meaning and definition of CSR

Corporate social responsibility (CSR) is a

CSR is new to India or it was
self-regulating business model that helps prevailing in some other form?
a company be socially accountable — to
itself, its stakeholders, and the public
Does CSR apply to your company?

• Yes if,

or or

Net worth> 500 crore Net profit>5 crore

Turnover>1000 crore

In any of the previous three years…

 Defining CSR - No acceptable
definition

Profit maximization v. CSR: the

CSR and What are manager’s dilemma
the
Strategy dilemma? Do companies and managers have
a duty to stakeholders?

Can businesses ‘do well by doing

good’?
AB Carroll: “CSR is the conduct of a business so that it is economically
profitable, law abiding, ethical and socially supportive”.
Corporate Social Performance Model
 Evolution of CSR
SN Time period Economic currents State role Corporate CSR
1 1850-1914 Industrialization Colonial Extraction Dynastic Charity
2 1914-1947 Trade barrier for new Colonial exploitative Support freedom struggle
Industries
3 1947-1960 Socialism, Five Year Plans Support new state; launch
Protectionism new rural initiatives

4 1961-1990 Heavy regulation License raj; development Corporate trusts

failure
5 1991-2013 Liberalization Shrinking in production; Family trust, Public-
expanding in social Private partnership, NGO,
provision Sponsorship
6 2013- present Globalization Need to manage inequality; Introduction of mandatory
new reforms to liberalize CSR- 2%
further
CSR in India: Volunteering or Compliance
 Now what for CSR?

• 1. CSR committee: Three or more directors with at least one independent director.

• 2. CSR policy: Activity/ Programme

• 3. Spend 2%: Of average net profit of last three years

• 4. Disclosure: Annual report and on website

• New amendments (1st Aug, 2019)- Fine+ imprisonment

• Fines for both the company and defaulting officers ranging from Rs 50,000 to Rs 25 lakh
and Officers also liable for imprisonment of up to three years, as per the provisions in the
Companies Amendment Bill, 2019
CSR spending
Top 10 companies by CSR spend
(Amt. inDevelopment
₹Crore) ₹ 123
Sector wise break
₹ 123 up of CSR1%Spend
₹ 121 ₹ 36 Education
₹ 157 2%
2% 1% 1% 1% 0.22% ₹ 19
₹ 160 Health & WASH
₹ 165 2% 0.21% Environment
₹ 18
₹ 192 2% Rural Development
Women Empowernment
4%
PM Relief Fund
₹ 326 32%
Others
12% Sports Promotion
₹ 2728
₹ 1017 Art & Culture
Slum development
Administrative Overheads
14% Swachh Bharat Kosh
₹ 1213 26%
Any Other fund
₹ 2246
Clean Ganga Fund
Contribution to Corpus
Mode of implementation
Reason’s for CSR

Develop good
Being sensitive to
relationship with Brand image Reputation
all stakeholders
local community

Employee Customer Sources of

engagement retention Innovation
Toward Corporate Shared Values
Shared Value: Corporate policies and practices that enhance the competitive advantage and
profitability of the company while simultaneously advancing social and economic conditions in the
communities in which it sells and operates.
Shared value is not corporate social responsibility, philanthropy, or even sustainability, but a new way to
achieve economic success.
CSR VS CSV
Creating Shared Value: Levels of Shared Value

Reconceiving product
and Markets

Redefining Productivity
and value chain

Building supportive
clusters
Creating Shared Value: Levels of Shared Value
1. Reconceiving product and Markets

Bamboo Bike

https://www.youtube.com/watch?v=-SGxk6jgGC0

Affordable Purified drinking water- WaterHealth

https://www.youtube.com/watch?v=lHpFyiRmrS8
1. Reconceiving product and Markets
1. Reconceiving product and Markets
2. Redefining Productivity
and value chain
• Naryan Hrudyalaya- Low cost
healthcare in India
• Dr. Devi Shetty

• Affordable heart surgery for the lower

and middle income patients

• https://www.youtube.com/watch?v=
8bQ1P2TiT_U
2. Redefining Productivity and value chain
3. Building supportive
clusters
• Cluster of supporting companies and
infrastructure.
• Silicon Valley- IT
• https://www.youtube.com/watch?v=UO-
8CMdeSHA
• Patanjali- Haridwar
• Surat- Textile
3. Building supportive clusters
 Session

Social Entrepreneurship
SOCIAL ENTREPRENEURSHIP
Meaning of Social Entrepreneurship

Social Entrepreneurship

Business to solve social problems through

innovative solutions- Business Models
 Muhammad Yunus Dr. Harish Hande Sal Khan
(Nobel Peace Prize 2006) Founder and chief- SELCO Founder and CEO- Khan
Academy
 Social Enterprises opportunities

• Agriculture
• Energy- Solar
Social Problems Opportunities • Education
• Water utilization
• Healthcare
• Vocational Training
• Women Empowerment
• Waste Utilization
Passion to
solve the
social issues

Source: Martin, R. L., & Osberg, S. R. (2015). Two keys to sustainable social enterprise. Harvard Business Review.
 SOCIAL ENTERPRISE SPECTRUM

Source: “Social Enterprise Spectrum: Philanthropy to Commerce” by J. Gregory Dees. Harvard Business School Publication
 SOCIAL ENTERPRISE SPECTRUM

Source: “Social Enterprise Spectrum: Philanthropy to Commerce” by J. Gregory Dees. Harvard Business School Publication
 SOCIAL ENTERPRISE SPECTRUM

Source: “Social Enterprise Spectrum: Philanthropy to Commerce” by J. Gregory Dees. Harvard Business School Publication
Social enterprise business models
Sr. no Business Model
1 Entrepreneur
support
2 Market intermediary
3 Employment
4 Cooperative
How it works? Examples
Sells business support to its target Microfinance Gramin Bank
population. organizations,
consulting, or tech
support
Provide services to clients to help Supply cooperatives like Handlooms and
them access markets. fair trade, agriculture, handicrafts
and handicraft
organizations
Provide employment opportunity and Disabilities or youth Restaurants employing
job training to clients and then sells organizations providing persons with
its products or services on the open work opportunities in disabilities, Lijjat Papad
market. landscape, cafes, (Shri Mahila Griha
printing, or other Udyog)
business
Provides members with benefits Bulk purchasing, Amul- Co-operative
through collective services. collective bargaining business model
(union), agricultural
coops, credit unions
 Transformational
Entrepreneurship to
Make Societal
Impact

Source: Marmer, M. (2012). Transformational entrepreneurship: Where technology meets societal impact. Harvard Business
Review
 Transformational
Entrepreneurship to
Make Societal
Impact

Source: Marmer, M. (2012). Transformational entrepreneurship: Where technology meets societal impact. Harvard Business
Review
 SOCIAL ENTREPRENEURSHIP: Social Impact and Financial Results
• Key Challenges and Critical Success Factor for Social Entrepreneurship: Simultaneously create
financial value for their investors and social value for those they seek to serve.

• Build business models that reduced friction between commercial and social goals smoothen the path
to growth.

• Those who prioritized financial goals over social goals were much more likely to experience high
rates of growth and have greater social impact.

• Entrepreneurs with dual missions regularly face tradeoffs. - The entrepreneurs’ approach to tradeoffs
plays a critical role in their ability to scale.

• One of the best ways to avoid sacrificing financial sustainability for social impact is to build a
business model that reduces the total number of tradeoffs.

• Just because a social enterprise have a misalignment, it doesn’t mean it won’t scale. It just means you
have to be even smarter.

Source: Rottenberg, L., & Morris, R. (2013). New Research: If you want to scale impact, put financial results first. Harvard Business Review.
Analytical Tool: Evaluating Social Entrepreneurial Position
 Evaluating Social Entrepreneurial Position
• Entrepreneurs and businesses tend to gravitate to the top right and bottom left sections.

• Entrepreneurs who deal with tradeoffs by prioritizing social goals over financial - design business
models that require more tradeoffs to be made.

• Entrepreneurs who fall in the upper right-hand corner - do not obsess over the conflicts between the
social and financial objectives of their companies. Focused their attention on growth.

Entrepreneurs leading social enterprises should consider the following:

• Design business models that align financial and social goals as closely as possible to minimize
tradeoffs and reduce friction.
• When tradeoffs must be made, prioritize financial goals over social ones to maximize the long-term
sustainability of the business.
• Entrepreneurs with strong business backgrounds who develop passion for social issues tend to do
this very effectively.
• Encourage entrepreneurs at social enterprises to prioritize long-term sustainability when dealing with
trade-offs.
Business
and
Ethics
Is Ethics Part of
Business?
 Ethics

• It is the study of what individuals, groups, organizations

and governments ought to do, as opposed to what they
actually do.
Meaning of • In other words, it is applying our value structures to the
Business decisions we make about how we should live our lives (or
the decisions we make as members of groups,
Ethics organizations or governments).

Business Ethics

• Involves the study of what managers, entrepreneurs and

corporations ought to do, all things considered, in creating
value and avoiding harm to other individuals, companies or
governments.
THEORIES OF
MORAL
REASONING
What Will You Do? Save Five and Sacrifice one?
What Will You Do? Save Five and Sacrifice one (Family)?
What Should Doctor Do? Save Five and Sacrifice
one?
• Imagine you are a doctor.

• You have five patients who all need transplants in order to live.

• Two each require one lung and another two each require a kidney and the fifth needs a
heart.

• In the next ward there is another individual recovering from a broken leg.

• But other than their knitting bones, he/she is perfectly healthy.

• Would you kill the healthy patient and harvest their organs to save five others?
 Justice with Michael Sandel, Harvard University
https://www.youtube.com/watch?v=kBdfcR-8hEY&list=PL30C13C91CFFEFEA6&index=1

• Justice: What's The Right Thing To Do? Episode 01 "THE MORAL SIDE OF MURDER“
• Justice: What's The Right Thing To Do? Episode 02: "PUTTING A PRICE TAG ON LIFE"
• Justice: What's The Right Thing To Do? Episode 03: "FREE TO CHOOSE"
• Justice: What's The Right Thing To Do? Episode 04: "THIS LAND IS MY LAND"
• Justice: What's The Right Thing To Do? Episode 05: "HIRED GUNS"
• Justice: What's The Right Thing To Do? Episode 06: "MIND YOUR MOTIVE"
• Justice: What's The Right Thing To Do? Episode 07: "A LESSON IN LYING"
• Justice: What's The Right Thing To Do? Episode 08: "WHATS A FAIR START?"
• Justice: What's The Right Thing To Do? Episode 09: "ARGUING AFFIRMATIVE ACTION"
• Justice: What's The Right Thing To Do? Episode 10: "THE GOOD CITIZEN"
• Justice: What's The Right Thing To Do? Episode 11: "THE CLAIMS OF COMMUNITY"
• Justice: What's The Right Thing To Do? Episode 12: "DEBATING SAME-SEX MARRIAGE"
 Why Ethical Decision Making Differ?

• Distinction between killing and letting die.

• The former is active while the latter is passive.

• In the first trolley dilemma, the person who pulls the lever is saving the life of
the five workers and letting the one person die. After all, pulling the lever does
not inflict direct harm on the person on the side-track.

• But in the footbridge scenario, pushing the fat man over the side is in intentional
act of killing.
FIVE THEORIES OF MORAL REASONING
Rule based morality (German Philosopher- Immanuel Kant)
Look at good, right intentions rather than consequences (never tell a lie)

Universalism/Deontology Do what is right, no matter the cost. Look at good, right intentions rather
than consequences
“Do the Right Thing” Do we want individuals or companies to follow this?
Could we imagine this decision becoming a general principle?
Does this decision respect others as equal beings with equal dignity?

Will the decision create benefits or more benefits than harms?

Utilitarianism What is the overall long-term effect of this
What if we overestimate the pain (costs) and underestimate the
Cost/Benefit Analysis benefits
The majority is not always right; who protects the minority?

Are any human rights at stake, violated or possibly threatened

Basic “inalienable” rights - rights one has no matter what is background
Rights-Based Right to life and survival, to labor (to work) etc.
Human Rights United Nations Universal Declaration of Human Rights [See
http://www.un.org/en/udhrbook/pdf/udhr_booklet_en_web.pdf]
FIVE THEORIES OF MORAL REASONING
Treat each individual, stakeholder, and organization involved
as an equal and provide equal opportunity?
• Making judgments that are free from discrimination
Fairness and Justice Giving every person their “due,” what is owed, earned, or
deserved
•
Distributed Justice: how do we distribute opportunities,
•goods, services, welfare, voting, jobs, awards etc. fairly?
Does it offer any special advantages to some parties and not to
others?

• Do you live the life you want to live?

Character and • How would a virtuous person or a good company make
Virtue Ethics this decision?
• Is this a positive or negative precedent for managerial
or corporate behavior?
 8-Steps Process of Ethical Decision-Making
1. Facts: Obtain the facts
2. Issues: Identify the dilemma
3. Alternatives: What choices do you have?
4. Stakeholders: who has an interest? What are their motivations? How much
power does each hold?
5. Impact: Stakeholders’ resulting impacts on you? benefits/harms,
rights/wrongs?
6. Guidance: Guidance from ethical theory, your profession, or your organization
7. Action
8. Monitor Outcomes
 Case Victor Min (47)- Manager

Motox- Respect for each Physical

Moto X assault
employee, safety first, and
Canadian company
absolute safety and security
of the employee at the
workplace

JV (60%)

Nambu, interestingly, had

Nambunese Neglect the
a tradition of the highest
company safety gears
respect to authority and
Nambu obedience towards one’s
seniors

Tomy Tang (25)- Employee

The Human Resource Officer of this Nambunese
operation, Mr. Stan Stark, needs to address this
issue.

Please suggest what Mr. Stan Stark should do?

Discuss this in the light of ethical decision-making

process.
Tomy Tang (25)- Employee

Options
a) Lay off victor and Tommy
b) Lay off Victor and give another chance to Tommy to
follow Safety regulations
c) Dismiss Tommy and Give another chance to Victor
d) Give another chance to both Victor and Tommy with
proper instructions and monitoring

https://www.menti.com/3rf8zc1bxk
The voting code 1291 4331
Victor Min (47)- Manager
1. Lay off victor and Tommy
• Both violated the norm
• Victor violated the global ethical norm of company
• Tomy violated the warnings and the safety instructions
• Set the example for all the employees
• Brand image of the company

Tomy Tang (25)- Employee Victor Min (47)- Manager

2. Lay off Victor and give another chance to Tommy to follow
Safety regulations
• Violated the global ethics code
• Have larger important role to play in the organization

Tomy Tang (25)- Employee

3. Dismiss Tommy and Give another chance to Victor

• Tommy has a lesser important role than Victor

• Victor-competent employee and important resource- more powerful
stakeholders
• Moral standards from Motox company

Victor Min (47)- Manager

4. Give another chance to both Victor and Tommy with proper
instructions and monitoring
• Establish the conversation between both and give chance
• Give them written warning

Tomy Tang (25)- Employee Victor Min (47)- Manager

How will you decide?
1. Facts and 2. Issues- Identify the dilemma
• Information on culture
• Stakeholders
• Nambu Govt, Residence, workers
• Employees of the organization
• Previous work history and behaviour of Victor and Tomy
2. Issues- Identify the dilemma

MotoX global ethics- No Nanbu’s culture- compensation

physical harm Vs. and apology
Tomy Tang (25)- Employee

3. Alternatives
a) Lay off victor and Tommy
b) Lay off Victor and give another chance to Tommy to
follow Safety regulations
c) Dismiss Tommy and Give another chance to Victor
d) Give another chance to both Victor and Tommy with
proper instructions and monitoring

Victor Min (47)- Manager

 4.Stakeholders
• Who has an interest?
• Employees of the Motox
• Employees of the Nambu
• Govt.- Nambu
• What are their motivations?
• Employment and growth of Nambu
• How much power does each hold?
• Nambu’s employees and Govt.
Decision- Give another chance to both Victor and Tommy with
proper instructions and monitoring
• Establish the conversation between both and give chance
• Explore the job transfer/rotation
• Give them written warning- Utilitarianism, Right based theory,
Fairness and Justice Theory

Tomy Tang (25)- Employee Victor Min (47)- Manager

5. Impact of the decision
• Impact on the profitability (Utilitarian Approach- cost benefit analysis)
• If both are fired than profitability will be hurt
• Many stakeholders will be impacted- if you fire both
• Brand image will be tarnished if we fire Tomy and Victor
• Culture- Acceptance in Nambu’s culture
• Risk associated with the violence by the local community (Right based
theory)
• What if the Tomy is fired and locals creates tension?
DEONTOLOGY – ARE WE UTILITARIANISM - CBA RIGHTS BASED – ARE
6. Guidance
DOING THE RIGHT
THING?
THERE ANY HR AT STAKE?
from the
Theories of
business
ethics
FAIRNESS AND JUSTICE – CHARACTER & VIRTUE –
IS EACH STAKEHOLDER, ARE WE BEHAVING LIKE
TREATED WITH JUSTICE? A VIRTUOUS UNIT?
6. Guidance from your profession, or your
organization
• What happened in the past with similar incidence in your
organization/professional experience?
• What is the credibility of the actor- Mr. Stark?
• NA in the present case- no information provided
7&8- Action and monitor outcomes
• Take action and monitor the outcome for sufficient time
• Communicate effectively the reason for taking action
• Take stakeholders in confidence before taking the actions-
constructive dialogues
• Important stakeholders include
• Nambu Local community leader- Govt. representative
• Authorities at MotoX Canada
• Employees at Nambu plant