Relations between
Suppliers - Distributors - Customers
Core
Competencies
Resources and superior capabilities that are
sources of competitive advantage over a
firm’s rivals
Strategy
An integrated and coordinated set of
actions taken to exploit core competencies
and gain competitive advantage
Business-level
Strategy
Providing value to customers and gaining
competitive advantage by exploiting core
competencies in individual product markets
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
1
Mission:
To provide
customers with the
right parts at the
right time in the
right place at the
lowest cost and the
best quality
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
2
The Challenges We Face
• Maintaining high quality as volume
increases
• Hyper-competitive market; Lots of good
products
• High customer expectations
Our Success Depends on Delivering:
Quality/Value
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
3
Supply Chain Overview
Supply Chain continues to evolve based on
The Toyota Way and TPS:
1. Customer First
2. Respect for humanity
3. Continuous Improvement (Kaizen)
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
4
Supply Chain Philosophy
Customer First:
1.
Customer-driven supply chain
•
•
•
•
Respect for Humanity:
Environmentally responsible and safety first
Collaboration with business partners
Associate engagement
•
Continuous Improvement (Kaizen)
Process improvements through PDCA cycle with associate engagement
Logistics
1.
Quality
•
2.
Lead-Time
•
3.
Accuracy and damage reduction
Consistency and reduction (sequential integrity)
Cost
•
Maximizing use of cubic space
•
Elimination of waste and incidental work
Associate Development
Growing Sales Volume
Increasing Complexity
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
5
People
Strengthen Associates
 Expand TPS Knowledge & Application
 Lead Under the Toyota Way
 Provide Opportunity and Learning
 Improve Two-Way Communication
People
Associate
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
6
Process
Supply Chain Leadtime Reduction
Vendor (NA/JP)
Vendor Fill
Transit
PC Bin
PC O/H Inventory
PC Fill
15% Reduction
Lead-time &
Days of Supply
Transit
PDC Bin
PDC O/H Inventory
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
7
Preparedness
Supply Chain Variability
Vendor (NA/JP)
Vendor Fill
Transit
PC Bin
PC O/H Inventory
PC Fill
15% Reduction
Lead-time
Variability
Transit
PDC Bin
PDC O/H Inventory
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
8
Rising Volume
Associate Creativity
Lead Time Reduction
Cycle Stock
Inventory Reduction
Variance Reduction
Supply Chain
Velocity
Safety Stock
Inventory Reduction
More Space Capacity
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
9
Small Lot / High Frequency
Increases Velocity
DEALER
PDC
Supplier
PC
Dlr
PDC
PC
Splr
Reduces Variability
1 DAY
1 DAY
1 DAY
1 DAY
1 DAY
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
1 WEEK
10
Why are we making these changes?
Sales Volume (UIO)
Size of Parts
Proliferation
More Piece
Volume
Bigger Truck
Parts
More Part
Numbers
Bigger Locations
More Locations
More Inventory
System, Space and Storage Challenges!
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
11
Strategic Drivers:
Prepare Distribution Network to
Respond to Growth & Complexity
Develop Associates
Meet Rising Customer Expectations
Globalize Supply Chain
Reduce Impact on Environment
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
12
Customers: Business-Level Strategic Issues
 Customers are the foundation of successful
business-level strategy
– Who will be served by the strategy?
– What needs those target customers have that the
strategy will satisfy?
– How those needs will be satisfied by the strategy?
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
13
Customers: Who, What, Where
 Firms must manage all aspects of their
relationship with customers
– Reach: firm’s success and connection to customers
– Richness: depth and detail of two-way flow of
information between the firm and the customer
– Affiliation: facilitation of useful interactions with
customers
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
14
Customer Needs—Who?
Determining the Customers to Serve
Consumer
Markets
Customers
Industrial
Markets
Market Segmentation
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
15
Basis for Customer Segmentation
Consumer Markets
1. Demographic factors (age, income, sex, etc.)
2. Socioeconomic factors (social class, stage in
the family life cycle)
3. Geographic factors (cultural, regional, and
national differences)
4. Psychological factors (lifestyle, personality traits)
5. Consumption patterns (heavy, moderate, and
light users)
6. Perceptual factors (benefit segmentation,
perceptual mapping)
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
16
Customer Needs—What?
 Customer Needs to Satisfy
– Customer needs are related to a product’s benefits and
features
– Customer needs are neither right nor wrong, good nor
bad
– Customer needs represent desires in terms of features
and performance capabilities
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
17
Customer Needs—How?
 Determining the Core Competencies Necessary
to Satisfy Customer Needs
– Firms use core competencies to implement value
creating strategies that satisfy customers’ needs
– Only firms with capacity to continuously improve,
innovate and upgrade their competencies can expect to
meet and/or exceed customer expectations across time
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
18
Types of Potential Competitive Advantage
 Achieving lower overall costs than rivals
– Performing activities differently (cheaper process)
 Possessing the capability to differentiate the
firm’s product or service and command a
premium price
– Performing different (valuable) activities
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
19
Two Targets of Competitive Scope
 Broad Scope
– The firm competes in many customer segments
 Narrow Scope
– The firm selects a segment or group of segments in the
industry and tailors its strategy to serving them at the
exclusion of others
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
20
How to Obtain a Cost Advantage
Determine and
control
Reconfigure, if
needed
Cost Drivers Value Chain
 Alter production process
 New raw material
 Change in automation
 Forward integration
 New distribution channel
 Backward integration
 Change location relative
to suppliers or buyers
 New advertising media
 Direct sales in place of
indirect sales
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
21
Examples
of ValueCreating
Activities
Associated with
the Cost
Leadership
Strategy
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
22
Value-Creating Activities for Cost Leadership
 Cost-effective MIS
 Few management layers
 Simplified planning
 Consistent policies
 Effecting training
 Easy-to-use manufacturing
technologies
 Investments in technologies
 Finding low cost raw
materials
 Monitor suppliers’
performances
 Link suppliers’ products to
production processes
 Economies of scale
 Efficient-scale facilities
 Effective delivery schedules
 Low-cost transportation
 Highly trained sales force
 Proper pricing
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
23
Cost Leadership Strategy: New Entrants
The Threat of
Potential Entrants
 Can frighten off new entrants
due to:
– Their need to enter on a large
scale in order to be cost
competitive
– The time it takes to move
down the learning curve
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
24
Cost Leadership Strategy: Suppliers
Bargaining Power
of Suppliers
 Can mitigate suppliers’ power
by:
– Being able to absorb cost
increases due to low cost
position
– Being able to make very large
purchases, reducing chance of
supplier using power
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
25
Cost Leadership Strategy: Buyers
Bargaining Power
of Buyers
 Can mitigate buyers’ power by:
– Driving prices far below
competitors, causing them to
exit, thus shifting power with
buyers back to the firm
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
26
Cost Leadership Strategy: Substitutes
Product Substitutes
 Cost leader is well positioned
to:
– Make investments to be first to
create substitutes
– Buy patents developed by
potential substitutes
– Lower prices in order to
maintain value position
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
27
Cost Leadership Strategy: Competitors
Rivalry with
Existing Competitors
 Due to cost leader’s advantageous
position:
– Rivals hesitate to compete on
basis of price
– Lack of price competition leads to
greater profits
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
28
Cost Leadership Strategy (cont’d)
 Competitive Risks
– Processes used to produce and distribute good or
service may become obsolete due to competitors’
innovations
– Focus on cost reductions may occur at expense of
customers’ perceptions of differentiation
– Competitors, using their own core competencies, may
successfully imitate the cost leader’s strategy
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
29
Differentiation Strategy
 An integrated set of actions taken to produce
goods or services (at an acceptable cost) that
customers perceive as being different in ways
that are important to them
– Nonstandardized products
– Customers value differentiated features more than they
value low cost
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
30
How to Obtain a Differentiation Advantage
Control if needed
Cost Drivers
Reconfigure to
maximize
Value Chain
 Lower buyers’ costs
 Raise performance of product or service
 Create sustainability through:
 Customer perceptions of uniqueness
 Customer reluctance to switch to nonunique product or service
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
31
Value-Creating Activities and Differentiation
 Highly developed MIS
 Emphasis on quality
 Worker compensation for
creativity/productivity
 Use of subjective
performance measures
 Basic research capability
 Technology
 High quality raw materials
 Delivery of products
 High quality replacement
parts
 Superior handling of
incoming raw materials
 Attractive products
 Rapid response to customer
specifications
 Order-processing procedures
 Customer credit
 Personal relationships
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
32
Examples
of ValueCreating
Activities
Associated with
the
Differentiation
Strategy
SOURCE: Adapted with the permission of The Free Press, an imprint of Simon & Schuster Adult Publishing Group, from Competitive
Advantage: Creating and Sustaining Superior Performance, by Michael E. Porter, 47. Copyright © 1985, 1998 by Michael E. Porter.
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
Figure 4.3
33
Differentiation Strategy: New Entrants
The Threat of
Potential Entrants
 Can defend against new
entrants because:
– New products must surpass
proven products
– New products must be at least
equal to performance of
proven products, but offered
at lower prices
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
34
Differentiation Strategy: Suppliers
Bargaining Power
of Suppliers
 Can mitigate suppliers’ power
by:
– Absorbing price increases due
to higher margins
– Passing along higher supplier
prices because buyers are
loyal to differentiated brand
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
35
Differentiation Strategy: Buyers
Bargaining Power
of Buyers
 Can mitigate buyers’ power
because well differentiated
products reduce customer
sensitivity to price increases
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
36
Differentiation Strategy: Substitutes
Product Substitutes
 Well positioned relative to
substitutes because
– Brand loyalty to a
differentiated product tends
to reduce customers’ testing
of new products or switching
brands
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
37
Differentiation Strategy: Competitors
Rivalry with
Existing Competitors
 Defends against
competitors because brand
loyalty to differentiated
product offsets price
competition
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
38
Competitive Risks of Differentiation
 The price differential between the differentiator’s product
and the cost leader’s product becomes too large
 Differentiation ceases to provide value for which customers
are willing to pay
 Experience narrows customers’ perceptions of the value of
differentiated features
 Counterfeit goods replicate differentiated features of the
firm’s products
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
39
Focus Strategies
 An integrated set of actions
taken to produce goods or
services that serve the needs
of a particular competitive
segment
– Particular buyer group (e.g.
youths or senior citizens
– Different segment of a
product line (e.g.
professional craftsmen
versus do-it-yourselfers
– Different geographic markets
(e.g. East coast versus West
coast)
 Types of focused strategies
– Focused cost leadership
strategy
– Focused differentiation
strategy
 To implement a focus
strategy, firms must be able
to:
– Complete various primary
and support activities in a
competitively superior
manner, in order to develop
and sustain a competitive
advantage and earn aboveaverage returns
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
40
Factors That Drive Focused Strategies
 Large firms may overlook small niches.
 A firm may lack the resources needed to compete in the
broader market
 A firm is able to serve a narrow market segment more
effectively than can its larger industry-wide competitors
 Focusing allows the firm to direct its resources to certain
value chain activities to build competitive advantage
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
41
Information Networks
 Link companies electronically with their
suppliers, distributors, and customers
– Facilitate efforts to satisfy customer expectations in
terms of product quality and delivery speed
– Improve flow of work among employees in the firm and
their counterparts at suppliers and distributors
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
42
Risks of the Integrated Cost Leadership/
Differentiation Strategy
 Often involves compromises
– Becoming neither the lowest cost nor the most
differentiated firm
 Becoming “stuck in the middle”
– Lacking the strong commitment and expertise that
accompanies firms following either a cost leadership or
a differentiated strategy
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
43
Explain the relationship between ethics and the law
Discuss why it is important to behave ethically
Differentiate between the claims of the different stakeholder groups that are
affected by managers and their companies actions
Describe four rules that can be used to help companies and their managers
act in ethical ways
Identify the four main sources of managerial ethics
Distinguish between the four main approaches toward social responsibility
that a company can take
Ethical Dilemma
quandary people find themselves in when they have to decide if they should
act in a way that might help another person even though doing so might go
against their own self-interest
Ethics and
Social Responsibility
McGraw-Hill/Irwin
Contemporary Management, 5/e
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
The Nature of Ethics
 Ethics
– The inner-guiding moral principles, values, and beliefs that
people use to analyze or interpret
a situation and then
decide what is the
“right” or appropriate
way to behave
There are no absolute or indisputable rules or principles
that can be developed to decide if an action is ethical or
unethical
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
45
Ethics and the Law
Neither laws nor ethics
are fixed principles
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
46
Ethics and the Law
Ethical beliefs lead to the development of laws and
regulations to prevent certain behaviors or
encourage others
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
47
Ethics and the Law
Laws can change or
disappear as ethical
beliefs change
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
48
Changes in Ethics Over Time
Managers must confront the need to decide what is
appropriate and inappropriate as they use a
company’s resources to produce goods and
services
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
49
Question?
Who has a claim on a company’s resources?
A. Employees
B. Customers
C. Suppliers
D. Stakeholders
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
50
Stakeholders and Ethics
 Stakeholders –
– people and groups affected by the way a company and
its managers behave
– supply a company with its productive resources and
have a claim on its resources
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
51
Stakeholders and Ethics
When the law does not specify how companies
should behave, managers must decide what is
the right or ethical way to behave toward the
people and groups affected by their actions
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
52
Types of Company Stakeholders
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
53
Stockholders
 Want to ensure that managers are behaving
ethically and not risking investors’ capital by
engaging in actions that could hurt the
company’s reputation
 Want to maximize their return on investment
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
54
Managers
 Responsible for using a company’s financial
capital and human resources to increase its
performance
 Have the right to expect a good return or reward
by investing their human capital to improve a
company’s performance
 Frequently juggle multiple interests
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
55
Managers
Problem has been that in many companies corrupt
managers focus not on building the company’s
capital and stockholder’s wealth but on
maximizing their own personal capital and wealth
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
56
Discussion Question: Managers
Is it ethical for managers to receive vast
amounts of money from their
companies?
A. Yes
B. No
C. Sometimes
D. Never
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
57
Employees
Companies can act ethically toward employees by
creating an occupational structure that fairly and
equitably rewards employees for their
contributions
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
58
Suppliers and Distributors
 Suppliers expect to be paid fairly and promptly
for their inputs
 Distributors expect to receive quality products at
agreed-upon prices
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
59
Vendor Conduct
Gap’s Code of
Vendor Conduct
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
60
Customers
 Most critical stakeholder
 Company must work to increase efficiency and
effectiveness in
order to create
loyal customers
and attract new
ones
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
61
Community, Society, and Nation
 Community
– Physical locations like towns or cities in which companies are
located
– A community provides a company with the physical and social
infrastructure that allows it to operate
 A company contributes to the economy of the town or
region through salaries, wages, and taxes
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
62
Ethical Decision Making
Figure 4.3
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
63
Question?
Which ethical decision rule produces the greatest
good for the greatest number?
A. Utilitarian Rule
B. Moral Rights Rule
C. Justice Rule
D. Practical Rule
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
64
Ethical Decision Models
Utilitarian Rule
 Decision that produces the greatest good for the greatest
number
– How do you measure the benefits and harms that will be done
to each stakeholder group?
– How do you evaluate the rights and importance of each
group?
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
65
Effects of Ethical/Unethical Behavior
Figure 4.4
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
66
Ethical Decision Models
 Moral Rights rule
– Decision that best maintains and protects the
fundamental or inalienable rights and privileges of the
people affected by it
 Justice rule
– Decision that distributes benefits and harms among
people and groups in a fair, equitable, or impartial way
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
67
Ethical Decision Models
Practical rule
- Decision that a manager has no hesitation about
communicating to people outside the company
because the typical person would think it is
acceptable
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
68
Practical Decision Model
1.
2.
3.
Does my decision fall within the acceptable standards
that apply in business today?
Am I willing to see the decision communicated to all
people and groups affected by it?
Would the people with whom I have a significant personal
relationship approve of the decision?
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
69
Why should managers behave ethically?
The relentless pursuit of self-interest can lead to a
collective disaster when one or more people start
to profit from being unethical because this
encourages other people to act in the same way
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
70
Trust and Reputation
Trust – willingness of one
person or group to have
faith or confidence in the
goodwill of another person
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
71
Trust and Reputation
Reputation – esteem or high repute that individuals
or organizations gain when they behave ethically
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
72
Determinants of Ethics
Figure 4.5
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
73
Societal Ethics
Standards that govern how members of a society
should deal with one another in matters involving
issues such as fairness, justice, poverty, and the
rights of the individual
People behave ethically because they have internalized
certain values, beliefs, and norms
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
74
Occupational Ethics
Standards that govern how members of a profession, trade, or
craft should conduct themselves when performing workrelated activities
– Medical & legal ethics
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
75
Individual Ethics
Personal standards and values that determine how
people view their responsibilities to other people
and groups
– How they should act in situations when their own selfinterests are at stake
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
76
Organizational Ethics
Guiding practices and beliefs through which a
particular company and its managers view their
responsibility toward their stakeholders
– Top managers play
a crucial role in
determining a
company’s ethics
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
77
Social Responsibility
Way a company views its duty or obligation to make
decisions that protect, enhance, and promote the
welfare and well-being of stakeholders and
society as a whole
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
78
Approaches to Social Responsibility
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
79
Approaches to Social Responsibility
Obstructionist approach – Companies choose not to
behave in a social responsible way and behave
unethically and illegality
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
80
Approaches to Social Responsibility
Defensive approach – companies and managers stay
within the law and abide strictly with legal
requirements but make no attempt to exercise
social responsibility
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
81
Approaches to Social Responsibility
Accommodative approach – Companies behave
legally and ethically and try to balance the
interests of different stakeholders against one
another so that the claims of stockholders are
seen in relation to the claims of other
stakeholders
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
82
Approaches to Social Responsibility
Proactive approach –
Companies actively embrace socially responsible
behavior, going out of their way to learn about the
needs of different stakeholder groups and utilizing
organizational resources to promote the interests
of all stakeholders
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
83
Why Be Socially Responsible?
1.
2.
Demonstrating its social responsibility helps a
company build a good reputation
If all companies in a society act socially, the
quality of life as a whole increases
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
84
Role of Organizational Culture
Ethical values and norms help organizational
members:
– Resist self-interested action
– Realize they are part of something bigger than
themselves
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
85
Ethics Ombudsman
 Responsible for communicating ethical standards to
all employees
 Designing systems to monitor employees conformity
to those standards
 Teaching managers and employees at all levels of the
organization how to appropriately respond to ethical
dilemmas
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
86
Obligations of member states
Competent Authorities
FPS Employment,
Labour and Social
dialogue
FPS Economy, SMEs,
Self-employed and
Central Contact
Energy
Point
FPS Health, Food
Chain Safety and
Environment
Consumer Safety
Commission
FPS Mobility
and Transport
FPS Finance
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
87
Obligations of member states
Competent Authorities
FPS Economy
DG Energy
DG Quality and Safety
DG Control and Mediation
Central Laboratory
Safety Division
Product Safety Service
Installation Safety Service
Decentralised services
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
88
Obligations of member states
Consumers
Industry
Market
surveillance
Consumers,
industry, notified
bodies ...
Authorities
RAPEX
Advisory
commissions
Central Contact Point
Ext. experts
and
mediation
Product
Follow up
control
Market surveillance by the authorities
Commercial Economics Market System (suppliers,
distributors, customers) Ethics and Social Responsibility
89