International Project Week

From Oxymoron Case to Integrity Case - a Call for Moralization of Management in the Context of International Business Ethics and Corporate Social Responsibility

Thursday, May15th 2014

Prof. Birgit Weyer, M.Sc., D.M.

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What are the goals of today‘s lecture?

Students are able to differentiate between CSR based on the Oxymoron Case, Business Case and Integrity Case

They can explain why moralization of management is important

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Logic of the Oxymoron Case

Ethical behavior is costly (positive Oxymoron Case)

Economic success cannot afford to pay for the cost of ethical behavior (negative Oxymoron Case)

Discarded based on Business Case

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From Oxymoron Case to Business Case

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Logic of the Business Case

Not behaving ethically responsible is costly (negative Business Case)

Ethic pays off (positive Business Case)

Business ethics is a strategic success factor

Important CSR-Initiatives (e.g. EU-Greenbook) plead the Business Case

Most important theoretical basis Stakeholder-Theory (Freeman,1984)

Ethical businesses are rewarded, unethical are punished through stakeholders (moralization of markets)

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The Moral Market

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Theorie of the Business Case

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Critical Issues in the Business Case

Stakeholder can evaluate the ethical behavior of businesses only in very view cases

Greenwashing or „Ethical Storytelling“

Influential stakeholder don‘t care about ethical behavior of businesses -> missing motivation to punish businesses

Business Case works in democratic societies

Conclusion:

Businesses can be successful based on their ethical behavior , they don‘t have to be!

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The Business Case

Simple Aufklärungsarbeit

Double Reassurance

- Ethic is a „comforting slogan“

- Ethic doesn‘t interfere with business as usual

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From Moralizing the Market to Moralizing Management

Moralizing the market (Business Case) shows through

- ethically oriented stakeholder groups (e.g. employees, customer)= wirtschaftsbürgerliche integrity of the individual

- business owner feels responsibility for success (Ethics without moral)

Moralization of management (Integrity Case) shows through

- Decisions which consider the consequences

- „Earn money in a good way“ rathern than „earn good money“

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Moralization of Management

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Legitimizing Profits

Make financial success dependent on social, ecological and economic legitimy

Be able to justify your behavior toward one-self and others and evaluate it as „good“

Limiting financial business success to „enough“ ROI

Clear definition of what is not wanted (customers, contracts, suppliers)

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Define Your Personal Values

Self-reflection relating to values and purpose in life

Leading others requires knowing yourself

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Value Management in Practice

① Codify

- Is – Analysis of implizit rules and assumptions - Should description based on company goals- Evaluate value- and goal conflicts as well as risks for the organization- Define potential successes and evaluate against risks- Kodify behavioral values in "Code of Ethics“ - Mind the “value quadrant“ meaning values in relation to ethics, cooperation, performance and communication

This codifcation is the explication of moral knowledge in a business.

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Value Management in Practice

② Communicate

- Management of values requires constant feedback!

- Include major stakeholders in the definition of values

- An open, participate internal and external communication strategy is the basis for success of value management

-Mistakes in communication will result in resistance

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Only 1/3 of Employees is Aware of Company Values

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Value Management in Practice

③ Implementation

- Experiencing and internalizing of codified moral knowledge, the implicit moral knowledge of the business and it‘s employees- Transfer of values into leadership instruments e.g. choice of strategic partners, CSR initiatives, employee performance management- Values as KPIs in goal setting - Recruiting should choose future employees based on their willingness to live by the company values- Underscores the seriousness in implementing value management

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Value Management in Practice

④ Organize

- In training programs company values and value based behavior are discussed

- Conflicts in relation to goals are presented for dialog

- Values are the background for every decision

- Instruments are seminars and workshops, as well as communication and public relations materials

- Continuous evaluation of implementation and, if necessary, adjustment of values

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