CH-1-2 The Context of Responsible Management – Principles of Responsible Management: Global Sustainability, Responsibility, and Ethics : Book Guide

This Document Contains Chapters 1 to 2 CHAPTER 1 THE CONTEXT OF RESPONSIBLE MANAGEMENT GET IN TOUCH! This instructor’s manual can only cover a small initial selection of relevant advice. Please visit the website of the Center for Responsible Management Education www.responsiblemanagement.net or write to Oliver Laasch through [email protected] to share your ideas for new content, experiences in teaching with the book, constructive criticism, and, of course, questions. The textbook is a snapshot of a quickly developing field that aims to educate responsible managers and create responsible businesses, and which requires constant updating. We invite you to become part of a growing community of academics and practitioners taking on this task. THE INSTRUCTOR’S MANUAL This Instructor’s Manual contains a brief chapter introduction, a listing of chapter objectives, an expanded outline, chapter summary, teaching points, answers to end of chapter questions and exercises, and test questions. INTRODUCTION This chapter introduces the external factors influencing responsible management. The first section presents main sectorial actors (from government, business, and civil society sector) and typical subjects (also called issues) in responsible management. The second section then gives answers to the question “Why do companies and individuals engage into responsible management activities?” by illustrating five main drivers of responsible management activity. The third section of the chapter asks the opposite question of “What keeps companies from engaging into responsible management?” by presenting a set of five typical inhibitors and criticisms encountered when engaging in responsible management. CHAPTER OBJECTIVES After reading this chapter, students should…  . . . understand main sustainability, responsibility, and ethics issues.  . . . be able to map the main actors and their roles in responsible management.  . . . understand main drivers of responsible management.  . . . be able to manage barriers, inhibitors, and criticisms of responsible management. CHAPTER OUTLINE I. Subjects and Actors of Responsible Management: The setting of responsible management activities is determined by the subjects addressed (e.g. climate change, human rights, transparency) which can be divided into the three different background theories (sustainability, responsibility, and ethics) and the organizational actors with which responsible managers work (e.g. businesses, NGOs, local governments). A. Subjects and Background Disciplines • Subjects, issues, and causes are often used as synonyms • Background disciplines • Sustainability: Triple bottom line • Responsibility: Stakeholder • Ethics: Moral dilemma B. Sectorial Actors • Governmental (Public): e.g. city council, public sector utility company • Civil society: e.g. civil society organization, individual activist • Business (Private): e.g. multinational corporation, social enterprise C. The Workplace of Responsible Managers • Organizations from the business sector can be classified by their 1. mission (philanthropic or egoistic) 2. value creation (external or internal) • Resulting business-sector organization types are irresponsible and responsible businesses, social enterprises, and business foundations. • The work environment of a responsible manager will change significantly, based on what type of organization he works in. II. The Megatrend and Its Drivers: The drivers of responsible management can be grouped into five broad categories: stakeholder wants and needs, new markets and business case, converging global crises, Internet and transparency, and new institutionalized powers. A. Stakeholder Wants and Needs: Among the majority of main stakeholder groups we can observe a general tendency to favor businesses that behave responsibly. Examples are employees picking companies with a reputation for responsibility to work with, financiers identifying “good companies” through socially responsible investment practices, and consumers basing their buying decision on responsible company reputation. B. New Markets and Business Case: This driver refers to how responsible management practices can make business sense from a self-serving perspective. The term “business case” describes the advantages that may be achieved. One dominant line of action is the advantages achieved from new markets related to sustainability, responsibility and ethics topics. • Business Case: ○ Potential Win-Win or virtuous cycle ○ Potential benefits: Attraction, motivation, and retention of employees; cost savings; reduced risk; the attraction of new investment; and increased profitability • New Markets: ○ Consumerist movements for responsibility: e.g. LOVOS, LOHAS, political consumption. ○ Customer attraction and retention, improvement of product quality of products. C. Global Crises: Companies have begun to be driven in their responsible management practices by the need to respond to global social, environmental, and ethical issues and crises: • Potential for global mega crisis ○ Systemic global challenges ○ Effect of crises on business • Significance for responsible management ○ Need to understand crises interrelatedness with business practices ○ International organizations as sources of information D. Internet, Transparency, and Globalization: The global communication ecosystem has evolved to being more effective in detecting and scaling the communication of good and bad business behavior. • Shared global standards for responsible conduct • Technical factors ○ Internet availability ○ Mobile devices • Increased reputation and brand risks and rewards E. Institutionalization of Responsible Management: A network of global and local institutions is quickly growing in size and influence. An important role is played by organizations and norms such as the following: • ISO 26 000 (social responsibility) and ISO 14 000 (environmental management) • Global Reporting Initiative (GRI) • United Nations Global Compact (UNGC) • World Business Council for Sustainable Development (WBCSD) • Dow Jones Sustainability Index (DJSI) III. Barriers, Inhibitors, and Criticisms: For responsible managers, it is of importance to understand the arguments brought forward by critics of responsible management. Typical counter-points can be attributed to the lines of argumentation illustrated through the following subsections. A. Profit Issues: Criticism related to profit typically arises from the following two diverging arguments: • Questioning profit as good motivation: “Companies are focusing on responsible business only to make more profits, to instrumentally and greedily abuse a good topic for profit reasons.” • Friedman Argument: “The business of business is to generate profit for shareholders, and there is no legitimate responsibility toward any other stakeholder.” B. Economic Crises: The argument has been made that responsible management activities will be cut down in times of economic hardship. However, it has been found that the budget for responsible management actually has a tendency to remain constant or even to increase during economic crises when responsible management focuses on core business activities and is designed to generate advantages for the business. C. Greenwashing • Greenwashing: The practice of creating a misleading impression of a company´s social, environmental, or ethical performance. • Recommendations: Do what you say, say what you do (“Walk the talk”), communicate truthfully, and abstain from exaggeration and misleading communication D. Cause Criticism: Stakeholders might, rightfully or not, criticize the causes a company addresses for many different reasons, such as differing world-views and lobbying interests. E. Applicable for Only a “Selected Few”: An often-uttered argument against the assumption of responsible business is that the topic applies only to big corporations from developed countries involved in producing products for the end consumer. As argued in the chapter, responsible business is relevant for • Small and medium enterprises (SMEs) and big corporations • Business-to-business (B2B) and end-consumer companies • Developing and developed countries F. Operational Inhibitors: Responsible managers find a great variety of operational issues that inhibit their efforts in practice. A survey from 2010 found the 1. complexity of implementation across functions, 2. competing strategic priorities, and 3. a lack of recognition from the financial markets as main operational inhibitors. With the ongoing learning process, the typical inhibitors will change over time. PRINCIPLES OF THE CONTEXT OF RESPONSIBLE MANAGEMENT (SUMMARY) I. Critical factors in the context of responsible management are issues encountered and related actors and drivers of, and barriers to responsible management. II. Subjects, also called issues or causes, in responsible management can be categorized into the ones relating primarily to the triple bottom line (sustainability), to stakeholders (responsibility), and to moral dilemmas (ethics). III. Sectorial actors stem from the governmental, civil society, and business sectors. All three sectorial actors typically provide different solution capabilities for the subjects and issues of responsible management. IV. All responsible business background domains—sustainability, responsibility, and ethics—may be applied on a micro (individual), meso (organizational), and macro (systemic) level. V. Main drivers of responsible management efforts can be grouped into five categories: (1) stakeholder wants and needs; (2) new markets and business case; (3) converging global crises; (4) Internet, transparency, and globalization; and (5) institutional power. VI. Barriers, inhibitors, and criticisms to responsible management can be grouped into six categories: (1) profit criticism, (2) economic crises, (3) greenwashing, (4) cause criticism, (5) the “selected few” argument, and (6) a set of inhibitors stemming from operational realities. VII. Greenwashing describes a situation where stakeholders perceive a company as creating a misleading impression of it social, environmental, and ethics performance. VIII. The Friedman argument is the claim that the only responsibility of a business is profit generation, and thus companies and managers should not spend money on responsible business activities. TEACHING POINTS 1. Objective and rationale: The overarching goal of this chapter is to introduce students to the context in which responsible managers work and develop their businesses. First and foremost, responsible managers need to be generalists, able to act with a sound understanding of conventional management plus the ability to integrate sustainability, responsibility, and ethics in whatever they do. Second, responsible managers have to be able to work in, and with, organizations from all sectors, as the social and environmental purpose of responsible management often leads to jobs in public or non-governmental organizations. Also, responsible managers working in private business often have to extensively collaborate with stakeholders from other sectors. Third, responsible managers require a capacity to handle a quickly changing set of drivers and inhibitors that influence their work and to handle the different, often controversial, arguments for and against responsible management. 2. Recurrent theme: The three background domains of responsible management―sustainability, responsibility, ethics (SRE)―which are first introduced in this chapter, are a recurrent theme that will be repeated throughout all chapters. Chapters 3-5 are exclusively dedicated to exploring each of the three topics. In this chapter, it is important to help students develop a basic understanding of the core concepts of each domain (sustainability-triple bottom line; responsibility-stakeholders; ethics- moral dilemmas) to help them understand from which domain perspective actors/communicators act and argue. This is important in practice, but also in later chapters where we will often shift in perspective, for instance, from sustainability to ethics, which requires a different focus of conceptual thinking. 3. Jargon and arguments: Another function of this chapter is to introduce jargon and arguments in responsible management that are used repetitively in changing contexts. The words greenwashing, business case, and the Friedman argument are such terms that will come up repeatedly in conversations and also in later chapters. 4. Buy-in and job relevance: This first chapter is also crucial in convincing students of the importance and real-life relevance of responsible management. There is always the danger of sustainability, responsibility, and ethics courses to be perceived as idealistic, but with little practice relevance. One distinctive feature of this book is to highlight the implications of sustainability, responsibility, and ethics (SRE) for mainstream management. Chapters 6 to 15 center on how to responsibly fulfill “normal” management functions from strategy to accounting. In this context it is important to highlight that when we talk about responsible managers, we talk about both groups: the managers who integrate SRE into their mainstream management job, and the managers who focus on managing SRE as their main job. 5. Critical skills and discussion: Also, in our experience, there is mostly a small group of students skeptical about responsible management. This first chapter, with its often critical perspective on responsible management, provides a good environment to engage in productive discussions between critical and overly uncritical students. Also later chapters will have possibilities to develop discussion and controversy and to hone critical skills, especially Chapters 3-5, which each have a section on “diverging views.” 6. Reflection and motivation: Many students will have a deep personal response to the topics of this first chapter. The section on converging global crises is especially an eye-opener for students, which makes them reflect deeply about what those problems mean and what they could do about them. To facilitate this introspective, it might be helpful to use additional descriptive material to augment the chapter content, such as pictures, videos, articles, and web-based simulations to create a picture “closer-to-life.” Documentaries such as “The 11th Hour” or “An Inconvenient Truth” have proven to be effective. The potential personal commitment of students to the topic may facilitate interest in later course topics. Also, in the author´s experience this reflection often leads students to actively steer toward jobs related to responsible management, and even change their lifestyles. 7. Use of Interviews: The pioneer interview with Björn Stigson, former president of the World Business Council for Sustainable Development (WBCSD), illustrates central topics touched in the chapter from a very practical and unique perspective. Björn Stigson, who, in his role at WBCSD, has worked with many of the most advanced responsible business leaders, provides well-grounded and thought-provoking answers that might give students a feeling of “this is really happening in real-life.” The practitioner interview with Narine Arustamyan paints a very personal picture of a young manager working in the field of responsible business who students can identify with. Answers to End-of-Chapter QUESTIONS AND exercises A. Remember and Understand A.1. List the five main drivers of responsible business management. • Stakeholder wants and needs • New markets and business case • Converging global crises • Internet and transparency • Institutional power A.2. Outline the main types of barriers, inhibitors, and criticisms of responsible business. • Profit issues: Responsible managers might be accused of either “doing it only for the profit”, or it might be criticized that spending on responsible management reduces the profit shareholders (Friedman argument) • Economic crises: It might be argued that responsible management activities will be reduced in times of economic hardship. • Cause skepticism: The specific cause(s) (e.g. climate change, human rights) the responsible manager is involved into might be questioned in their legitimacy. • Operational inhibitors: Company-internal problems in the implementation of responsible management might arise. • “Selected few”: Companies might take a position of “this is not for us”, because of not belonging to the group of big, end-consumer product corporations from economically developed countries. • Greenwashing: Responsible managers might be accused of “not walking the talk” and creating a misleading impression of their companies social, environmental, and ethical performance. A.3. Define the three background domains of responsible management, sustainability, responsibility, and ethics, by elaborating their differences and similarities. Due to their similarities, the three domains of business sustainability, responsibility and ethics are often used interchangeably. For instance, a company´s effort to ensure fair wages and decent working conditions along its supply chain might be seen through an ethics lens by focusing on the ethical dilemma of “low prices through cheap wages” or as a responsibility issue, as it relates to the company´s responsibility for the employee stakeholder, or it might be subsumed under sustainable business as it strengthens the businesses´ triple bottom line by restoring social capital in the supply chain. There are many overlaps between the three topics, but they can be clearly differentiated by referring to each topic´s core concept (sustainability- triple bottom line; responsibility-stakeholders; ethics-moral dilemmas) and by clear definitions such as the ones provided in the chapter: • Sustainability is related to systemic social, environmental, and economic issues that threaten the well-being or even survival of current and future generations. The core concept of sustainability is the triple bottom line. • Responsibility deals with the relationship to the various groups that affect or are affected by a business. Those groups are called stakeholders. • Ethics is related to making the right decision in dilemma situations. A.4. Define the following terms and explain how they are related: Greenwashing is when companies create a misleading impression of their social, environmental or ethical performance. The business case refers to achieving benefits for the business through responsible management practices. The Friedman criticism refers to Nobel Prize winner Milton Friedman who said that the only responsibility of a business was to make profit. For instance, we could relate greenwashing with the business case, as companies trying to “look greener” than they are may do so to create reputational benefits by over-communicating responsible management activity. A clear connection between the Friedman criticism and the business case is that a company can make profits from being responsible by focusing on creating a business case for responsible management. Friedman´s argument against responsible business would not be valid in this scenario. B. Apply and Experience B.5. Conduct an investigation into one of the global issues or crises in order to deeply understand its roots. Then find two other global issues or crises to which the first one relates. Describe the ways in which they are interdependent. An exemplary answer could be the climate change and the carbon issue. To reach a basic understanding, students should find out, for instance, about the following topics: • Main sources of carbon emissions (e.g. • Main country contributors • Carbon footprints • The role of fossil fuels • Strategies to reduce carbon emissions • Criticism of man-made climate change • Non-carbon-intensive sources of energy There may be many alternative global issues and crisis that could be related to carbon. One, for instance, is the global food crisis. In the quest for less-carbon intensive fuels, biofuels have begun to play a major role. Biofuels are often produced from food crops or on land that could otherwise have been used for food production. Thus, biofuels have become competition to food production and have the potential to increase food scarcity. A second interrelated issue might be biodiversity. Where ecosystem conditions are altered by changed climatic conditions, such as in the Arctic and Antarctic regions, biodiversity loss has become a frequent phenomenon. B.6. Find information about a small and medium-sized company from a developing country that is involved in business-to-business (B2B) marketing. Does the company have responsible business activities? For students with little practical work experience, the identification of a company mostly working business-to-business may seem difficult, as those companies per definition are not consumer brands. Lecturers may help here by pointing either to a specific company type (e.g. engineering companies that build machines for production or businesses that provide outsourcing services) or even by defining specific companies. Students then should have a look at the company website, or call the company to receive more information. Direct communication with the company might be necessary. Students should then summarize their findings in a short write-up or a presentation. B.7. Research real examples of each of the four organization types mentioned in Figure 1.3. Look up information on each respective organization and briefly explain why you think the chosen organizations are good examples for each organization type. Students can arbitrarily choose any organization as examples, as long as they can relate the organization credibly to the understanding of the respective organization type, such as the following examples: • Business foundation: The philanthropic Bill and Melinda Gates foundation has been founded independently from the company Microsoft and does not create any direct benefits for the company. • Social enterprise: The company TOMS Shoes was founded with the purpose to provide poor children with shoes, but under the condition to be profitable. • Responsible business: The multinational business Unilever is a mainstream for-profit company that has been able to integrate stakeholder concerns in all their operations, and that benefits a wide variety of stakeholders. • Irresponsible business: Any tobacco company will always be an irresponsible business, as the stakeholder value created is by far exceeded by the stakeholder costs, such as health-issues, biodiversity loss through tobacco monoculture, etc. C. Analyze and Evaluate C.8. What new stakeholder wants and needs can you observe in your personal environment? What do people—in their different roles as employees, consumers, and community members—expect from companies? Here students may comment freely on their personal observations. The following are potential examples: • My sister decided not to work for Shell, as she believes oil companies are bad for the environment. It was difficult for her to make the decision, because the pay they offered was very attractive. (employee role) • At home we have decided to buy only organic food from now on; probably we will need to change our retailer, because they do not have too much choice (consumer role). • My friend has shared that video about deforestation in the Amazon region with all his friends on Facebook. He said he thinks that everyone should know about it and stop buying from companies that do not certify all their forestry products with the Forest Stewardship council label (web-community/citizen role). C.9. Do you think the Internet has made transparency a reality? Discuss the pros and cons of the type of effects the Internet has on business in the area of transparency. Students are expected to express their own opinions in this question. Exemplary considerations that might be helpful in forming an opinion are: • Mobile technologies and social networks that can serve to instantly report business misbehavior • Businesses resources to control online media (e.g. through commercials on Google or YouTube) • Availability of responsible business reports online • Possibility for instant feedback and direct contact with businesses through social media forums • Problem of “browser bubbles” in the customized Internet C.10. Locate a random company´s website, and use the company’s reports to discover one inhibitor of its responsible business conduct and to identify its main responsible business driver. An example might be the report of the “Tesco and society report” of the UK-based third-biggest global retail business Tesco, which was published in 2013. Phil Clarke, the CEO of the company, mentions in the CEO letter that Tesco´s customers drive the company´s responsible business activities, according to the following quote: “Today, our customers are asking us: how do you help? What do you stand for? Are you part of the problem, or part of the solution?” He also mentions a recent issue where the company´s supply chain was involved in an issue where “some meat products sourced from across Europe had been contaminated with traces of horsemeat,” a critical issue for the company´s responsible business conduct. D. Change and Create D.11. Choose a global issue and think about how actors from the three sectors might collaborate to solve the issue. Write a one-page strategy document outlining a plan by which the sectorial actors could jointly solve the issue completely. In this task students are expected to provide a basic strategy to solve global issues, involving actors from public sector, civil society, and the business sector. An inspiring example could be the “Product RED” initiative, where the civil society organization “Product RED” allows companies to co-brand their product as so-called “RED Products,” of which a percentage of sales revenue is collected for the cause of fighting AIDS. The declared goal of “RED” is to eradicate AIDS in Africa, where the money is channeled with the help of public sector actors in fighting AIDS. TEST QUESTIONS 1. Subjects of responsible management a. may also be called issues or causes. b. may also be called background disciplines of responsible management. c. are sustainability, responsibility, and ethics. . d. include, for instance, the issue of product quality as an example of a sustainability issue. Answer: a 2. The triple bottom line is the main core concept of which of the following disciplines? a. Responsibility. b. Responsible Management. c. Sustainability. d. Ethics. Answer: c 3. In conversations with a close friend about responsible management, you realized that you and she framed the topic very differently. You were mostly talking about different stakeholders and how management should consider their interests, while your friend mostly referred to the triple bottom line, and how management must be good for the business, society, and environment. Which of the following statements describes your differing views best? a. She approaches the topic from a responsibility perspective, while you approach it from a sustainability perspective. b. You frame the topic from an ethics perspective, while she frames it from a sustainability perspective. c. You approach the topic from a responsibility perspective, while she approaches it from a sustainability perspective. d. You approach the topic from a socialist perspective, while she approaches it from an environmentalist perspective. Answer: c 4. Sectorial actors in responsible management a. are divided into the three groups of responsible businesses, irresponsible businesses, and social enterprises. b. should refrain from collaborating with other sectors to avoid communication problems. c. may collaborate to solve responsible management issues, to pool their resources in order to further joint causes. d. include non-governmental organizations as a typical example of an organization from the business sector. Answer: c 5. Ramesh works in a small civil-society organization with the mission to fight child labor in India. His organization has identified the need to quickly create global awareness of this issue. A critical point is the funding of a planned awareness campaign. Which type of actor has the most adequate resources to collaborate with Ramesh in the achievement of this goal? a. The Indian ministry of labor. b. A multinational company known for responsible labor standards. c. A labor Union. d. An Indian politician who is known to rally against human rights abuses. Answer: b 6. Which of the following organizational actors is not part of the governmental or public sector? a. City council of City A. b. The United Nations. c. A publicly-held energy company. d. A lobbying group. Answer: d 7. Imagine a company that primarily conducts responsible management activities because it has been shown to be a very effective tool in employer branding to attract high-potential employees. What is the main driver of this company´s responsible management activity? a. Global Crises. b. Greenwashing. c. Business case. d. Internet and transparency. Answer: c 8. Which one of the following is not a driver of the responsible management? a. Global crises. b. Stakeholder wants. c. Greenwashing. d. Business case. Answer: c 9. Your boss has heard about the “business case” for responsible management and asks you to tell him if and how his business could gain from focusing on sustainability, responsibility, and ethics. What should you tell him? a. Any responsible management activity will always result in advantages for the business! b. There are some responsible management activities that benefit your business directly and tangibly, others don´t. It is recommended to find a good balance. c. There are certain responsible management activities that typically result in tangible business advantages. You should identify these activities for your business and by all means exclusively implement the activities with such a “business case.” d. All companies can build an identical business case of accessing new markets, motivating employees, and reducing operational costs. Answer: b 10. A printing business claims to recycle 100% of the paper used in its process. In reality, the company used recycled paper for printing, but does not recover any of the paper it prints on. This is a. Cause criticism. b. Greenwashing. c. Business case. d. Friedman argument. Answer: b 11. A friend tells you that he does not believe in “all the panic” about global crises. Based on what you learned in class you think you must communicate a different perspective. What can you rightfully claim? a. Today´s issues and crises, such as water shortage, ecosystem degradation, and poverty are highly interconnected and have the potential to lead to a global mega-crisis. b. It is assured that human extinction is near and it can be proven scientifically. c. Global warming is the one and only big threat that will surely lead a global mega-crisis in the very near future. d. As a matter of fact, there are several global issues and crises for humanity, but fortunately they can all be solved independently, and one after another. Answer: a 12. The company BAD-Chemicals decides to compensate the victims of a chemical spill in one of its Indian factories after smartphone pictures of the injured led to a consumer boycott until compensation was granted. The company hopes that the amount of money spent for the compensation will be smaller than the loss in sales if they do not compensate. Which of the following drivers is least relevant in this case? a. Convergent global crises. b. Stakeholder wants. c. Internet & transparency. d. Business case. Answer: a 13. Which out of the following points is not an institution for responsible business as mentioned in the chapter? a. UNGC. b. ISO 26 000. c. FDH. d. WBCSD. Answer: c 14. Which of the following options is the primary standard for establishing sustainability reports? a. UNGC. b. ISO 26 000. c. GRI. d. WBCSD. Answer: c 15. You tell your aunt, who works in middle management at a local brewery, about your course in responsible management and ask her about her opinion regarding the topic. She quotes a phrase she had heard in a course during her own university education: “The only responsibility of business is profit.” Which is the term typically used to describe the phrase she uses? a. Friedman argument. b. Greenwashing. c. Cause criticism. d. GRI. Answer: a 16. You tell your aunt, who works in middle management at a local brewery, about your course in responsible management and ask her about her opinion regarding the topic. She quotes a phrase she had heard in a course during her own university education: “The only responsibility of business is profit”. Which of the following answers could you give, based on what you have learned in your course? a. This phrase comes from a Nobel Prize winner, so it must be right. b. This phrase coined by Edward Freeman has long been questioned. c. Profit can never be a legitimate responsibility of a business. d. This phrase was coined in a time when it was not known that being responsible often goes along with being profitable. Answer: d 17. Imagine you try to convince your colleagues of the importance of responsible management. They tell you “This is all good, but when the next economic crisis hits, we will stop doing that philanthropy stuff anyway.” How do you react, based on what you have learned in your course? a. In times of crisis, philanthropic spending is usually not cut back, as it is not part of a company´s core business activity. b. Yes, probably budgets related to responsible management will be cut even more drastically than the budgets for other business activities. c. You are right. All responsible management activity has to be reduced in times of economic crisis. d. Philanthropic spending will probably be cut, but we are talking about responsible management activities at the core of what we do, which are likely to be too important to what we do to be cut drastically. Answer: d 18. You have the chance to interview the leader of a medium-sized (SME) engineering company from Poland. He tells you that responsible management is only a topic for bigger companies and that only companies from economically developed countries should engage in such costly “add-ons.” Which of the following answers would be untrue? a. SMEs are increasingly asked by their clients to comply with social, environmental, and ethical standards. b. SMEs only account for a very minor percentage of business and economic activity, so in the big picture, it really does not matter too much if they engage in responsible management activities. c. Studies have shown that CEOs in regions with developing countries are more aware of the importance of responsible management than CEOs in regions with mainly developed countries. d. Responsible management practices are often even more important in economically developing than in economically developed countries. Answer: b 19. A company executive tells you about the problems she expects responsible management to make in her company. Based on what you have learned in your course, which of the problems is the least likely to occur? a. Difficulty implementing across functions. b. Employee resistance. c. Competing strategic priorities. d. Problems defining the topic. Answer: b 20. A logistics company faces massive problems in its renewable energies strategy because activist groups oppose its use of biodiesel. The activists have the argument that “food should be on the table, not burned in an engine.” What is the issue they’re facing called? a. A profit issue. b. Friedman argument. c. An operational inhibitor. d. Cause criticism. Answer: d CHAPTER 2 MANAGEMENT: BASICS AND PROCESSES GET IN TOUCH! This instructor’s manual can only cover a small initial selection of relevant advice. Please visit the website of the Center for Responsible Management Education www.responsiblemanagement.net or write to Oliver Laasch through [email protected] to share your ideas for new content, experiences in teaching with the book, constructive criticism, and, of course, questions. The textbook is a snapshot of a quickly developing field that aims to educate responsible managers and create responsible businesses, and which requires constant updating. We invite you to become part of a growing community of academics and practitioners taking on this task. THE INSTRUCTOR’S MANUAL This Instructor’s Manual contains a brief chapter introduction, a listing of chapter objectives, an expanded outline, chapter summary, teaching points, answers to end of chapter questions and exercises, and test questions. INTRODUCTION This chapter focuses on the internal structures and processes of responsible management. In the first section we have a close look at how the background domains of sustainability, responsibility, and ethics can be integrated into management practice and into the elements of management (goals, resources, efficiency, effectiveness, performance). We also review classic mainstream management theories and their significance for responsible management. In the second section, we focus on the responsible manager, her important role in facilitating change, the different hierarchical levels of managers, and the competencies required to be a successful responsible manager. The third section illustrates how to be responsible, sustainable, and ethical throughout the four management tasks of planning, organizing, leading, and controlling. CHAPTER OBJECTIVES After reading this chapter, students should…  . . . understand how traditional management evolves to responsible management.  . . . be able to identify the skills necessary to be a responsible manager.  . . . understand how to conduct the traditional management tasks of planning, organizing, leading, and controlling responsibly. CHAPTER OUTLINE I. Management Basics and the Evolution to Prime Management: Responsible management is an approach that embraces sustainability (triple bottom line), responsibility (stakeholder value), and ethics (moral excellence). If responsible management succeeds in creating a superior management performance, which is socially, environmentally, and economically sustainable, and which optimizes stakeholder value and creates moral excellence, then we may call it prime management. A. What Is Management and How Do We Make It Responsible?: Management is the process of working with people and resources to achieve performance effectively, efficiently, and in line with preestablished goals. We can distinguish the following elements of management, which must be aligned with sustainability, responsibility, and ethics (SRE) in order to make management responsible: • Goals describe the outcome aspired to in the management process and have to be in line with creating value for all stakeholders, in all three dimensions of the triple bottom line, and with high moral quality. • Resources are the input used in the management process to achieve predefined goals. Responsible management resources are social, environmental, and economic capital (triple bottom line), stakeholder value, and moral capital. • Effectiveness describes the degree to which the management process has contributed to the preestablished managerial goals. Responsible management effectiveness is measured in the amount of triple bottom line value and stakeholder value created and the degree of moral excellence achieved. • Efficiency describes the proportion between resource input and management output. Responsible management efficiency is measured by the ratios between the triple bottom line capital used and created, the stakeholder input and value created, and the moral issues encountered and moral excellence achieved throughout the management process. • Performance is the output of the management process. Responsible management performance is a product of the responsible management effectiveness and efficiency achieved. B. Evolution of Management Thought: This section elaborates on the relationship between classic management thought and new approaches. As a knowledge basis about management an overview of main streams of thought in management theory are summarized and interpreted regarding their relevance for responsible management. Additionally to these classic theories the top-three recommendations for the future development of management theory are presented, based on a Harvard Business Review Article by Gary Hamel, as they strongly align with responsible management themes: • Higher purpose of Management, oriented toward noble, socially significant goals. • Integrate community, citizenship, and stakeholder thinking in management systems. • Reconstruct management´s philosophical foundations. II. The Responsible Manager: Managers are in an influential position that allows them to be change agents through their companies. Managers may significantly influence their companies’ actions, which in turn influences the economic sphere and society as a whole. A. The Role of Managerial Hierarchies: Managers are typically divided into three hierarchical levels: • Frontline managers (operational managers), who are directly involved with non-management employees and supervise the company´s operations. • Middle managers (tactical managers), who translate the organizational goals and strategy into specific objectives and actions. • Top managers (“C-suite”), who are in charge of defining the organization´s normative structure and overall strategy. Responsible management may and should take place on each hierarchical level and can be subdivided into two distinct responsible manager profiles: • Mainstream (responsible) managers integrate sustainability, responsibility, and ethics (SRE) into their main job. • Specialized responsible managers manage SRE as their main job. B. Competencies for Prime Managers: Responsible managers require competencies additional to and often different from mainstream management skills. Such competencies (mainstream and responsible management competencies) can be divided into the following groups: • Domain competencies refer to the knowledge that makes one proficient in a certain field. • Methodological competencies describe the ability to perform a certain type of task or procedure, either physically or mentally. • Social competencies are skills directed at interaction with others. • Self-competencies are personal characteristics affecting a person´s self-perception and management, such as values, attitudes, beliefs, and other psychological conditions. III. The Responsible Management Process: The managerial process consists of the four management tasks: planning, organizing, leading, and controlling. In responsible management, each of these tasks has to integrate considerations related to the triple bottom line, stakeholders, and moral issues. A. Planning: Planning is the process of making decisions about goals and activities that will be pursued in the future. Planning in strategic management will be illustrated in great depth in Chapter 6, Strategy, which is why the focus in this chapter is on responsible decision making as a crucial part of the responsible planning task. • Decision making is a process that consists of four steps: analyzing the situation, generating alternative solutions, evaluating alternative solutions, and selecting the solution to be implemented. • Responsible decision making bases the judgment on how the decision affects the triple bottom line, stakeholders, and ethical desirability and how effective the respective option solves the managerial task at hand. The responsible decision making matrix is introduced as a tool to make responsible decisions. B. Organizing: Organizing is the process of building the structure, systems, and culture needed to implement a plan. In the organizing process a manager needs to make important choices best described by the following bullet points: • Mechanistic versus organic • Differentiation and integration • Delegation, collaboration, and decentralization C. Leading: Leadership is the process of influencing others to attain goals. Responsible leadership is the process of building stakeholder relationships to lead toward the fulfillment of a shared vision and goals. Leadership is based on power, the ability to influence others which can be derived from the following sources: • Legitimate power, based on a legal or contractual relationship • Coercive power, based on control over punishment • Reward power, based on controlling rewards • Referent power, based on appealing personal characteristics • Expert power, based on expertise and knowledge D. Controlling: Controlling is the process of assessing and steering business activities and outcomes within a set of predefined goals. Chapter 14, Accounting and Controlling, will extensively illustrate controlling methods for responsible management. The controlling process consists of the following four phases: 1. Defining performance standards 2. Measuring performance 3. Assessing performance fulfillment 4. Taking corrective actions PRINCIPLES OF MANAGEMENT: BASICS AND PROCESSES (SUMMARY) I. Responsible management (i.e., prime management) is management that embraces sustainability (triple bottom line), responsibility (stakeholder value), and ethics (morally favorable decisions). II. The three dimensions of responsible management are: sustainability, responsibility, and ethics. III. Responsible managers can be at the center of a virtuous circle of change in moving toward the achievement of more responsible companies, economies, and societies. IV. A responsible manager requires a set of competencies (domain, methodological, social, and self-competencies) that is different from the set required in mainstream management. V. The responsible or prime management process is based on the traditional four management tasks of planning, organizing, leading, and controlling, which evolve around sustainability, responsibility, and ethics. VI. Responsible decision making must assess stakeholder value, triple bottom line impact, and the moral value created by alternative choices. VII. Responsible leadership is the process of building stakeholder relationships to lead toward the fulfillment of a shared vision and goals. TEACHING POINTS 1. Take away message: It is necessary to critically question and adapt management theory and practice for sustainability, responsibility, and ethics and everyone can do so, no matter in what hierarchical position in an organization, no matter if student or professor. 2. Knowledge basics: Students should understand the basic elements of the management process and the four managerial task areas. The chapter covers a very basic, representative overview of theories, models and frameworks with the goal to create a basis for a better understanding of later chapters, where concepts, especially of mainstream management disciplines, will be illustrated with much greater detail. 3. Developing a (good) habit: The three background domains of responsible management― sustainability, responsibility, ethics (SRE)are applied with great detail on the general management process in this chapter. This application should train students to develop a habit of reinterpreting management theories and tools to integrate SRE. This integration task will be pursued further through Chapters 6-15, where established management topics from strategy to finance are reinterpreted to integrate SRE. 4. Empowerment of the individual: After Chapter 1 has shown the complexities of the responsible management environment and the need for change, this second chapter aims to make students understand and, more importantly, feel that they as individuals can make a difference. This perspective is especially prevalent in the section on the “spheres of managerial influence,” and through the special perspective on becoming a “Big Bang Being,” which covers the more spiritual component of becoming a change agent. The last set of questions in every chapter, titled “Change and Create” is designed to make students experience how resourceful and powerful they are and that they can make a change as individuals. 5. Development of additional competencies: This book primarily develops knowledge as a competence. As has been illustrated in the middle section of this chapter, there are many more competencies necessary to become a truly responsible manager. It is an important task for the educator to find out which competencies students are lacking most if they want to become responsible managers. One idea is to find this out through discussion. Students with job experience especially will have a very good feeling for why they were or were not able to manage responsibly in their jobs. Also, educators should consider the possibility of didactical alternatives to classic lecture-style that are more suitable to developing methodological, social, and self-competencies for responsible management. Examples could include problem-based or case-based learning, experiential immersions, and action learning. 6. Tricky terminology: An initial hurdle (for students AND lecturers alike) might be the use of the central terms responsible management and responsible business and their sub-domains of business sustainability, business responsibility, business ethics. Unfortunately, there are no universally accepted definitions for these terms yet. Many, often even contradictory, definitions exist in theory and practice. Developing a unifying framework for this book, which follows an internal logic, has been a challenge and a process involving many days of discussion and reviews with academics and practitioners. The logic followed here is that the umbrella terms “responsible management” and “responsible business” include the responsibility for the triple bottom line (sustainability), for stakeholders (responsibility), and for moral dilemmas (ethics). This second chapter focuses on the two umbrella terms, while subsequent chapters illustrate the three sub-domains mentioned. Chapter 3 focuses on business sustainability and sustainability management, the management of the triple bottom line. Chapter 4 is centered on business responsibility and responsibility management, the management of stakeholder relationships. Chapter 5 revolves around business ethics and ethics management, the management of ethical dilemmas and opportunities. The terms prime management and prime business aim at expressing that a management practice or a business has succeeded in all three domains of sustainability, responsibility, and ethics. This ordering scheme chosen competes with many different interpretations and the self-perception of practitioners in the domains, which is why it has been designed to represent a very open understanding. 7. Decision making matrix: The application of the responsible decision making matrix should be seen as just one possibility to consider sustainability, responsibility, and ethics in the decision making process. Students typically feel challenged when asked to assign a concrete value to an alternative of qualitative nature. A trick here may be to ask for a “majority gut feeling,” where students jointly vote. If an educator decides to explain the matrix, it is recommendable to co-develop it around a concrete case with the students, as this involves them in the whole reasoning process, and is an excellent practice for them to develop their own responsible decision making skill. 8. PRME Initiative: The end-of-chapter interview with Jonas Härtle, head of the PRME Secretariat, may be a good opportunity for lecturers to either understand how students think about a potential membership of their school in the PRME initiative or, in case the academic institution is already a member, to inform students about it and provide an overview of activities and engagement opportunities. Answers to End-of-Chapter QUESTIONS AND exercises A. Remember and Understand A.1. Describe the three dimensions of responsible management, mention each dimension´s core concept, and define prime management. Responsible management is a management for sustainability (optimizing the triple bottom line), for responsibility (optimizing stakeholder value), and for ethics (creating moral excellence). Prime management is when a manager succeeds in all three dimensions of responsible management. A.2. Describe the different layers of managerial influence that can lead toward a more responsible society. Managers, no matter on which hierarchical level, may influence the practices of the company they are working in, which in turn may influence the practices common in the surrounding economic system, and society in general. A.3. Explain each type of competency required by a responsible manager: domain, procedural, social, and self-competencies. Provide an example for each type of competency. • Domain competencies refer to the knowledge that makes one proficient in a certain field. For instance, a responsible manager in the marketing department would need to know about new sustainable consumption movements. • Methodological competencies describe the ability to perform a certain type of task or procedure, either physically or mentally. As an example, a responsible manager in the accounting department would need to know, how to establish a social and environmental indicator. • Social competencies are skills directed at interactions with others. Responsible managers in contact with many different stakeholders need to be able to relate and adapt to different stakeholders different needs, attitudes, and communication styles. • Self-competencies are personal characteristics affecting a person´s self-perception and management, such as values, attitudes, beliefs, and other psychological conditions. Many responsible managers pioneering the topic in their respective organization´s require substantial self-confidence and motivation to successfully manage organizational transitions, often against internal resistance. A.4. Briefly describe the four main tasks of the management process. The managerial process consists of the four management tasks: planning, organizing, leading, and controlling. In responsible management, each of these tasks has to integrate considerations related to the triple bottom line, stakeholders, and moral issues. Planning is the process of making decisions about goals and activities that will be pursued in the future. Organizing is the process of building the structure, systems, and culture needed to implement a plan. Leadership is the process of influencing others to attain goals. Responsible leadership is the process of building stakeholder relationships to lead toward the fulfillment of a shared vision and goals. Controlling is the process of assessing and steering business activities and outcomes within a set of predefined goals. B. Apply and Experience B.5. Use the competencies list in Table 2.4 to check whether you are equipped to become a responsible manager. Can you think of helpful competencies for a responsible manager that are not mentioned in that list? The answers expected here take the form of a self-assessment and personal reflection and will therefore vary considerably from student to student. The same holds true for potential additional competencies. B.6. Talk to a manager of your choice and ask whether—and if so, how—the topics of stakeholder value, triple bottom line, and morally desirable decisions affect that person´s work. In most cases, students will talk to managers in their family and among their friends. The goal of the task is to get an immediate impression of the importance of sustainability, responsibility, and ethics topics in practice, and to engage in discussion with course-external individuals who might enrich the experience with new points of view. B.7. Look up the Global Business Oath for Managers at www.globalbusinessoath.org/businessoath.php. How does this oath relate to the contents of this chapter? The global business oath is an oath for responsible managers, similar to the hippocratic oath for doctors, that touches on many of the points seen in this chapter. Lecturers might want their students to mention specific points of overlap of the oath and chapter contents. C. Analyze and Evaluate C.8. Analyze the answers of the manager you interviewed in Exercise B.6, and evaluate whether you would consider the person a responsible manager. Here, students are expected to think in the three domains sustainability (triple bottom line), responsibility (stakeholders) and ethics (moral dilemmas and opportunities) and to analyze the information given by the manager using those three frameworks. The person would be a responsible manager if she/he excels in all three domains. Concrete examples why and how the manager succeeds or fails in each domain are expected. C.9. Search online for a management decision for which a manager has been publicly criticized. Corporate scandals are interesting for this purpose. Use the responsible decision-making matrix in Table 2.5 to score decision alternatives in that management situation. Then decide what you would have done had you been in that manager’s situation. DOW Chemical was and still is largely criticized for acquiring a company that was responsible for the Bopal chemical spill in India, where thousands of people died and millions had to fight the consequences. Apparently, the acquisition was made without factoring in the still open claims of injured community members. Comment: The independent movie “The Yes Men Fix the World” might be an inspiring movie to discuss with students and could serve as a basis for a deeper analysis of the case using the responsible decision matrix. C.10. Imagine you could rewrite management theory to make it responsible management theory. Which of the classic mainstream management theories summarized in Table 2.2 would you integrate, and which ones would you completely exclude? Students are expected to review the theories and their application on responsible management and to decide which theories are beneficial, which are detrimental to responsible management as the student understands it. Students are expected to provide concrete reasons for integration and inclusion. D. Change and Create D.11. Propose concrete changes that the manager discussed in Exercises B.6 and C.8 could make in order to become a more responsible manager. Refer to the three dimensions responsibility, sustainability, and ethics. Students are expected to deeply reflect on the manager´s job and provide realistic alternative actions that improve the triple bottom line outcomes, stakeholder value, or moral value of what the manager does and how she/he works. D.12. Imagine you want to hire a responsible manager for your organization. Write a one-page job profile, describing the exact tasks to be performed on the job and the skills and experience you would want that person to possess. Imagine you will post this job letter in order to attract interested applicants. Exemplary tasks: • Collaboration with stakeholders • Assessment of the triple bottom line of products • Employee ethics trainings • Development of social policies Exemplary skills and experience • Social and communication skills for stakeholder networking • Knowledge about basic stakeholder assessment and triple bottom line management tools • Strong values • Management experience in diverse company departments TEST QUESTIONS 1. Which of the following statements about responsible management is wrong? Responsible management a. incorporates the three dimensions of sustainability, responsibility and ethics. b. should aim to optimize the triple bottom line and stakeholder value and to create moral excellence. c. may also be called prime management if it succeeds in all three domains of sustainability, responsibility, and ethics. . d. is a synonym for responsibility management, the management of stakeholder relations. Answer: d 2. Which of the following statements about management is wrong? Management a. can be divided into the three phases: input, process, and output. b. is the process of working with people and resources to achieve performance effectively, efficiently, and in line with pre-established goals. c. can be judged by its effectiveness, which describes how well human input and resources are used to create a certain output. d. can be judged by its efficiency, which describes the proportion between resources input and management output. Answer: c 3. What is measured by the ratios between the triple bottom line capital used and created, the stakeholder input and value created, and the moral issues encountered and moral excellence achieved throughout the management process? a. Effectiveness of responsible management. b. Efficiency of responsible management. c. Resources used in the responsible management process. d. Responsible management performance. Answer: b 4. Which of the following statements about traditional management theories and their relevance for responsible management is true? Traditional management theories a. include Mayo´s human relations approach, which can be used to better govern stakeholder relations. b. includes lean management, which is incompatible with responsible management, as it furthers inefficient and wasteful use of environmental resources. c. includes McGregor´s Theory x and Theory y, which both are excellent tools to manage responsibly. d. have to be avoided completely in order to build a new responsible management theory from scratch. Answer: a 5. Imagine you come to a job interview at a Korean multinational electronics company where you are introduced to Mooyoung Han, a sourcing manager for raw-materials. Mr. Han explains that after recent scandals, a major part of his job has become ensuring that the minerals used in appliance displays are sourced from responsible mining operations. This is why Mr. Han visits mines worldwide to speak to employees and check the health, safety, and environmental conditions, based on responsible business standards. Which of the following assessments is justified? a. Mr. Han must be one of the top-managers of the company if he personally takes care of such an important part of the operations. b. Mr. Han must be one of the company´s frontline managers, if he personally ensures the responsible management performance of the sourcing operations. c. Mr. Han must be part of the middle management, as he translates the operations strategy into operational goals which are then implemented by other managers of the company. d. Mr. Han must be a frontline manager of the company, as he takes important strategic decisions on the highest hierarchical level. Answer: b 6. Which of the following job profiles describes a mainstream responsible manager? a. A marketing director who uses a social marketing campaign. b. The environment, health, and safety (EHS) manager of a plant. c. The Chief Sustainability Officer. d. The community engagement manager. Answer: a 7. Which of the following statements about the competency model is wrong? Competencies a. describe an individual´s abilities, which can be subdivided into domain, methodological, social, and self-competencies. b. include the methodological competences, which describe how much a person knows. c. include social competencies, which describe how well a person is able to interact with others. d. include self-competencies, such as values, attitudes, and beliefs. Answer: b 8. Rogelio, community manager of a Columbian mining company, was asked to support his direct boss Francisco, who was in charge of the technical aspects of the mining operations. The issue was that Francisco had run into trouble with a group of representatives of the local rural community who complained that the noise from recurrent explosions frightened their livestock. Francisco already had told the group that the explosions are a regular part of the mining operations and that the noise was within the legally allowed range, so he would not waste his time talking to them again. The group reacted by blocking the gates of the mine and stateing they would not go away until the problem was solved. Which of the following responsible management competencies is least likely to help Rogelio solve the problem? a. The domain competencies in ethics and responsibility. b. The self-competence empathy. c. The social competency of delegation. d. The social competency of stakeholder communication. Answer: c 9. The operations manager of a small supermarket chain has been asked to constantly measure the energy consumption and CO2 emissions of the new refrigeration system to see if the company can meet its greenhouse gas targets. How would you categorize the management task? a. Organizing. b. Controlling. c. Planning. d. Leading. Answer: b 10. Which of the following terms fits the definition “the process of building the structure, systems, and culture needed to implement a strategy”? a. Organizing. b. Planning. c. Controlling. d. Leading. Answer: a 11. Which of the following examples is not part of the planning stage in responsible management? a. Setting your targets for employee, customer, and community satisfaction. b. Assessing if you should work on either a fair trade or forest stewardship council certification for your product. c. Preparing an indicator list for the company sustainability report. d. Identifying a market segment for the launch of a sustainable innovation product. Answer: c 12. Which of the following statements about responsible decision making is true? Responsible decision making a. is part of the managerial controlling task. b. is based on solution effectiveness as its most important criterion for decision making. c. cannot consider mainstream management, as it goes against sustainability, responsibility, and ethics. d. requires managers to assess several alternatives using criteria related to mainstream management, sustainability, responsibility, and ethics. Answer: d 13. Which of the following tasks is a typical example for organizing in responsible management? a. Using an environmental scorecard to monitor if you meet the given targets for environmental sustainability. b. The decision to buy either biodiesel or electric cars for the new company fleet. c. Delivering a motivational speech about the importance of good stakeholder relations, and introducing a new responsible performance initiative. d. Putting together a team for community engagement that jointly will improve the role the company plays in the local community. Answer: d 14. Which of the following statements about responsible leadership is the most accurate? Responsible leadership a. primarily refers to treating your direct subordinates responsibly. b. is the process of leading stakeholders to support your managerial goal. c. is leading stakeholders toward the fulfillment of a shared vision. d. is a synonym for responsible management. Answer: c 15. The proprietor of the small local German engineering company AUTOCORP, Anna Staebele, was well known for her brilliant strategic thinking and for being an honest and reliable person. It was for those reasons that other local business people followed her when she called for a joint initiative for green business. On what source of power is Staebele´s leadership based? a. Referent power. b. Coercive power. c. Legitimate power. d. Reward power. Answer: a 16. A sourcing manager chairs an initiative that involves efforts of suppliers, customers, employees, and governmental agencies that work together for the shared vision of a sustainable supply chain for one of the company´s main product groups. Which of the following terms best describes the initiative of the manager? a. Responsible decision making. b. Responsible management performance. c. Responsible business. d. Responsible leadership. Answer: d 17. You have been asked by your company’s director of risk management to develop a system to monitor and control ethical misconduct among employees. You establish an ethics hotline, where stakeholders can report ethical misconduct, and through active communication you determine that a majority of main stakeholders uses the hotline. You find that you receive one report of ethical misconduct per 100 employees, but feel there is still something missing in the process, so you ask several people for advice. Which suggestion is the most likely to make your controlling process complete? a. The head of controlling: “You have a fine tool there for measuring, but there is still one step missing- you have to define what we call ‘corrective actions,´ to improve your performance.” b. A colleague from the strategic planning department: “Look, you measure the right thing, but you need to find out if this 1/100 ratio is actually good or bad performance, so define your performance standards, and if you do not reach them, take corrective action!” c. An old college friend who is an accountant: “Your measurement system is bad because performance indicators always have to be measurable in monetary terms. How much does an ethical misconduct cost you?” d. An external consultant who specializes in quality management: “Your system is complete, but now we have to certify it with the ISO 9000 standard.” Answer: b 18. Bird’s eye view: Which of the following conceptual statements about the chapter topic is wrong? a. The main management tasks are planning, decision making, organizing and leading. b. Responsible management consists of managing the triple bottom line, stakeholders, and moral dilemmas. c. Responsible managers can be subdivided into specialized responsible managers, who concentrate on responsible management as their main job, and mainstream responsible managers who integrate responsible management into their main job. d. The four main competency groups are domain, procedural, social, and self-competencies. Answer: a 19. Which of the following statements about responsible management at AXA Winterthur is wrong? a. The company works with responsible management specialists in a department and assigned employees throughout the mainstream business functions. b. AXA Mainly measures its responsible management performance through the Dow Jones Sustainability Index. c. AXA organizes a high-level corporate responsibility (CR) steering committee as powerful leadership tool. d. Responsible management at AXA mainly focuses on ethics and moral dilemmas, but also covers stakeholder topics and the triple bottom line. Answer: d 20. In Practice: Which of the following short case descriptions is summarized incorrectly? a. The Songhai Centre in Nigeria helps to develop environmentally and socially sustainable farming practices. b. E-Choupal helps to diminish dishonest trade practices by creating a virtual marketplace. c. Olivetti has established a complex system of social services for their customers and managers. d. AXA Winterthur uses a company-wide corporate responsibility (CR) Committee to lead responsible management throughout the company. Answer: c Solution Manual for Principles of Responsible Management: Global Sustainability, Responsibility, and Ethics Roger N. Conaway, Oliver Laasch 9781285080260, 9789387994904