provide key insights that you gathered from this seminar  that were not on the PPT or mentioned directly by the lecturer.  at least 300 words need give two or three ideas and examples one of the ides

Seminar Notes

Semester 2, 2019, Module 1

Week 6

Managing Organizations

Ethics, Innovation and the Future

Welcome to Topic 6

Welcome to the sixth and final topic of the course Evidence-based Foundations of Management. This topic is primarily about integrating all that we have covered in the previous topics and using this knowledge to understand the evolution of management in relation to sustainability, both organizational sustainability and the changes required for managers to achieve the levels of global cooperation required to realize a sustainable future.

The consideration of ethics and ethical conduct is crucial to the evolution of management practices. The ‘leadership crisis’ reported by the World Economic Forum is a reflection of the difficulties that leaders and managers face in trying to balance the demands of shareholders with the expectation of responsibility placed on them by other stakeholders. In this topic we discuss the importance of addressing the need to resolve this tension and the potential to do so through innovation and entrepreneurism within our organizations.

Topic Learning Outcomes

By the end of this topic, participants will be able to address the following learning objectives:

TLO 6.1 Identify key aspects of organizational culture that help mitigate the tension between profit, and ethics and sustainability.

TLO 6.2 Learn how to use innovation and entrepreneurial thinking to address ethical issues in sustainable business.

TLO 6.3 Integrate core concepts and identify important relationships between the key lessons covered in the course.

Introduction: Lesson 1

The word ‘ethics’ is derived from the Greek word ‘ethos’ referring to character and manners, it is about your identity and how you relate to the world around you. It is about the choices you make, the values that guide you and what you learn along the way. This is a particularly important consideration for managers. In serving their function as an organizational leader, managers are often responsible for creating the reality, or at least, placing meaning on it through the framing of tasks, the assignment of projects, through performance management discussions and in their own reactions to feedback and outcomes. Subordinate often look to managers for unspoken guidance in how to act in the various situations that arise during the work day, thus, an unethical manager can very easily result in an unethical organization.

Mini-Case:

Unethical businesses are not sustainable. They might look good in the short term, but eventually the house of cards will come crashing down. Brooke Deterline reminds us in this TED talk that it is so easy for any of us to be influenced in social situations by the behaviour of others. She further points out that in business situations, when we are focused on the outcome and meeting business objectives and have the pressure of time and the expectations of shareholders or the CEO on us as well, ethics tend to fade into the background.

Creating ethical cultures in business – Brooke Deterline

https://youtu.be/wzicXbnmllc

Deterline, B. (2016). How to cultivate ethical courage. Greater Good Magazine. Available online at: https://greatergood.berkeley.edu/article/item/how_to_cultivate_ethical_courage

Case Question/Discussion

The mini-case highlights the need for managers and leaders in the workplace to role model ethical conduct and decision making. We would like you to share with us a personal example or a business case that you know of in which you or someone else has stood by and watched as someone else has acted unethically.

>> Why didn’t the bystander or witness say anything in this situation? In your opinion, what makes people keep quiet and not say anything when they see someone else acting unethically?

Theory : Ethical Leadership for Managers

Leaders at all levels of a large organization can play a significant role in shaping the ethical culture of an organization. From Enron to Libor, Goldman, Madoff, Wells Fargo and Barclays, companies all over the world have put ethics aside in preference of profit. Hyper-competition has led CEOs, CFOs and people in countless other positions and roles to make decisions that are not only illegal but that have resulted in thousands, if not millions, of people losing money, jobs, and homes and, at the same time, putting our flora and fauna and the Earth on whole, at risk of serious, irreversible damage.

Leaders within organizations can shape the culture of the organization through the use of both formal and informal mechanisms (Tenbrunsel, Smith-Crowe and Umphress, 2003). Formal mechanisms are those that are documented and visible, such as codes of ethics, codes of conduct, training programs, policies, formal communication, compliance and regulatory frameworks and also performance and reward frameworks. Research suggests that relying on formal frameworks exclusively does not work to prevent ethical failures (Gentlin, 2016). Formal mechanisms are technical solutions that have limited capacity in addressing adaptive challenges. The decisions people make under pressure and the way they act when no-one else is looking are matters of character and morality that can’t be regulated by rules and policies, or even the law as it turns out. The best managers can do is to create environments that promote ethical choices and behavior, by role modeling ethical conduct and recognize, reinforce and reward the ethical choices made by employees.

On the other hand, informal mechanisms are the “subtle messages that are received regarding ethical norms, or what is ‘really’ appropriate from an ethical perspective” (Tenbrunsel, et al., 2003). Generally speaking, formal mechanisms indicate what ought to be done while informal mechanisms communicate what is actually done in a particular organization. Managers, through their own actions and choices, the decisions they make, the decisions they fail to make and the behaviour they choose to punish, reward, promote or ignore, show their people not only what the organization really values, but also the type of behavior that is rewarded and gets you ahead (Gentlin, 2016).

The spirit of morality is awakened in the individual only through the witness and conduct of a moral person – Aristotle.

Managers and leaders within hierarchical systems have the ability to control recognition and rewards which help subordinates determine what is acceptable and appropriate behavior. Many years of research in the tradition of Social Learning Theory have provided relevant and trustworthy empirical evidence demonstrating how informal processes, such as observational learning from a role model, influence individual behavior (Gentlin, 2016; Bandura, 1977).

Ethical Decision-Making

Ethical decision making is highlighted in the context of ethical dilemmas. An ethical dilemma occurs when a manager needs to decide between alternative courses of action, each of which may be either immoral or even illegal. Some management education resources suggest that a decision is probably acceptable on ethical grounds if a manager can say ‘yes’ to the following (Jones, George, Barrett and Honig, 2016):

• Is my decision aligned with the accepted values, norms or standards that typically apply in this environment?

• Am I willing to have the decision communicated to all stakeholders affected by it in a public fashion?

• Would people with whom I have a significant relationship (family, friends, even managers in other organisations) approve of the decision?

Four approaches to ethical decision making are offered here as guidelines for understanding your own ethical decision making and the influences on your choices:

• Utilitarian: An ethical decision is one that produces the greatest good for the greatest number of people.

• Moral rights: An ethical decision is one that best maintains an protects the fundamental rights and privileges (freedom, life, safety, privacy, free speech, freedom of conscience) of the people affected by it.

• Justice: An ethical decision is one that distributes benefits and harms among stakeholders in a fair, equitable or impartial way.

• Practical: An ethical decision is one that a manager has no hesitation or reluctance about communicating to people outside the company.

Figure 1. Four approaches to ethical decision-making.

Ethics and Managerial Responsibility

Managers can do several things in an attempt to create an ethical organizational culture. Taken separately, the actions in the following list probably wouldn’t have much of an effect on individual behavior in the organization, this fact highlights the necessity for a manager to create a culture of ethics in which it is both the norm to act ethically and expected that each individual will make ethical decisions in the course of their work. Some examples of how a manager can implement practices leading to an ethical organizational culture include:

• recruit individuals with high ethical standards;

• establish a formal code of ethics and decision policies;

• lead by example;

• provide clarity around job goals and performance appraisal mechanisms;

• include ethics training in induction and orientation programs;

• conduct social audits; and

• offer support to employees facing ethical dilemmas.

Essentially there are two key considerations for managers regarding ethical conduct and decision-making:

First, it is important to remember that we are all susceptible to making bad choices in particular circumstances. More than six decades of research in social psychology have revealed the processes underlying social influence and normative group effects on individual behavior. In one of the most famous experiments ever conducted, Philip Zimbardo, in the Stanford Prison Experiment, demonstrated how normal, everyday people can perform abhorrent behaviors when influenced by context and power (Gentlin, 2016). The organizational context has enormous influential power, therefore managers must consider the a number of environmental factors in understanding people’s decisions to act unethically and not assume that removing ‘one bad apple’ will resolve the underlying issue that led to a particular ethical failure.

Second, managers and organizational leaders have a significant responsibility in creating ethical workplace climates and cultures in which ethical conduct is the norm. Leadership plays a central role in creating systems that sustain moral social norms and encourage and support ethical conduct. Through their own actions, inactions and choices, leaders provide followers with powerful messages about what is truly valued and what is required to survive and succeed in an organization (Gentlin, 2016).

Above all else, it is a manager’s responsibility to role model and establish standards of behavior that align the typical and expected patterns of behavior (the descriptive norms) with the rules and policies outlined by the organization (injunctive norms).

Human Relations. Chapter 5 Be Ethical at Work. Available online at: https://saylordotorg.github.io/text_human-relations/s09-be-ethical-at-work.html

EBM Spotlight: Approaches to ethics

Drawing upon the EBM capabilities that you developed in the Evidence-Based Practice in Management course, we would like you to identify the assumptions underlying each of the four approaches to ethical decision making presented in this lesson: the utilitarian, moral rights, justice and practical approaches.

Hint: ask yourself what values or priorities are each of the approaches based on?

Activity: Lesson 1

Activity: Ethical Leadership

In the video at the beginning of this lesson, Brooke Deterline talked about how easy it is for humans to stand by and allow unethical behaviour go unchecked.

We would like you to acquire and aggregate evidence of the organizational culture at Enron that led to the company’s downfall from ‘America’s most innovative company’ to losses of around $591 million and debt to the value of $628 million.

Question #1: How would you describe the culture at Enron in the late 1990s?

Question #2: What sort of leadership or role modelling was displayed by Enron’s CEO Jeff Skilling?

Question #3: What was it about Skilling’s personal values or goals that may have contributed to the unethical practices at Enron?

Question #4: What were the social and moral implications of the unethical conduct displayed by Enron leadership?

Introduction: Lesson 2

It is being predicted by futurists and management thinkers alike that ethics and human-centric considerations will become increasingly important as we move deeper into the digital age. In their book Humility is the New Smart Ed Hess and Katherine Ludwig draw on extensive multidisciplinary research to emphasize that the key to success in this new era is not to be more like robots but to build on the best of what makes us human and to excel at doing what technology can't. Journalist Sydney Harris summarised this sentiment in saying: The real danger is not that computers will begin to think like men, but that men will begin to think like computers.

In this lesson we will consider the role of ethical and human factors in understanding how innovation and digital disruption are changing the way we manage our organizations.

Mini-Case: Ethical Innovation

Futurist and author Gerd Leonhard challenges blind acceptance of the technological revolution and encourages us to question how smart machines will affect our humanness. He suggests that soon we will no longer be asking the question ‘how can we do this?’, but that technology will becomes so advanced we will be able to do almost anything we like, but then we must ask ‘why are we doing this?’. Leonhard advises that we must consider the depth, meaning and self-realisation potential of technology rather than simply charging ahead with innovation and digital disruption without questioning the ethics of what we are doing.

Digital ethics and the future of humans in a connected world | Gerd Leonhard | TEDxBrussels - https://youtu.be/bZn0IfOb61U

Leonhard, G. (2016). Technology vs Human – who is going to win? Available online at: https://www.forbes.com/sites/paularmstrongtech/2016/08/17/technology-vs-human-who-is-going-to-win-an-interview-with-gerd-leonhard/#4e81ba0f49cd

Case question

Imagine you are a senior executive at a large, multinational, high-tech company. Your Human Resource division has adopted a new performance management system that incudes a predictive analytics capability. Using huge data sets based on numerous sources of information (for example, outcomes on assessments used in recruitment, personal credit card use, number of times an individual has visited a health care provider, travel, mortgage size, mental health history, etc.), the system has predicted that one of your middle level managers has a high probability of becoming inappropriately aggressive toward the female members of his team within the next 6-12 weeks. Although all employees at your company have signed contracts stating they are willing for your HR personnel to use this data for performance management, no-one foresaw this sort of prediction being made therefore there are currently no policy guidelines for what to do in this situation.

>>As this person’s manager what do you do? Do you feel that it is ethical to use this information to intervene in this situation?

Theory: Managing Innovation and Disruption

In his article Who Will Lead in the Smart Machine Age? Ed Hess, Professor of Business Administration at the Darden School of Business, University of Virginia, claims that the technological revolution that will be brought about by artificial intelligence and other forms of technological disruption will result in a change in the skills that people will require in the workplace. Hess (2016) emphasises the need for business and management graduates to be able to undertake thinking processes and tasks that machines will remain unable to do well. He suggests these include:

• Higher-order critical thinking

• Creativity

• Imagination

• Innovation

• Tasks involving high emotional engagement with other human beings (i.e. trust-based relationships).

Link to Wikipedia page for ‘Innovation’ - https://en.wikipedia.org/wiki/Innovation

Link to Wikipedia page for ‘Disruptive Innovation’ -

https://en.wikipedia.org/wiki/Disruptive_innovation

Arguably, motivating people to engage in and develop their capacity for these processes will require managers to approach workplace leadership with a different style from that borne of the industrial revolution. The traditional ‘command and control’ approach is unlikely to be an effective way to facilitate flexibility, inspiration and strong relationships. A study of a New Zealand dairy product company operating in Bangladesh found that managers needed to approach leadership from alongside employees (i.e. participatory leadership), rather than from a top-down perspective, actively sharing vision and maintaining momentum for adapting the organisational culture in response to the business expansion (Siddiqui and Ahmed, 2016). In organisations that need to be able to operate in an environment of constant change, consistent two-way, open communication, facilitation of cross-functional collaboration and a coaching approach to performance management appear to be the most effective methods for ensuring high-performance in volatile contexts (Siddiqui and Ahmed, 2016).

Hess (2016) suggests that rather than developing traditional leadership skills managers wanting to succeed in the ‘smart machine age’ will be better positioned in developing ‘enabling’ skills – the skills required to enable the highest levels of human performance in the pursuit of the organisational mission and meaningful purpose. Hess (2016) goes on to outline four attitudes and behaviours that enablers should role model for their employees:

1. 1. Engage with the world as a lifelong learner, with an open, curious mind and a quiet ego (i.e. growth mindset see Dweck, 2015, Yeager and Dweck, 2012), (this also helps create a culture of learning and tolerance of failure within the organization);

1. 1. Embrace uncertainty, ambiguity, and complexity like a courageous scientist who is trained to:

1. 1. 1. embrace the unknown and acknowledge the extent of what remains unknown;

      2. learn by hypothesis testing;

      3. look for disconfirming data; and

      4. be a data-driven decision maker (i.e. take an evidence-based approach to management and decision making);

1. 1. Excel at managing self—how one thinks, focuses attention, and manages emotions and behaviors (see topic 3 of this course)—and excels at Otherness (as discussed in topic 4 of this course); and

1. 1. Enables the highest levels of human development and performance by creating and taking responsibility for the organizational culture and employee learning and personal development by implementing processes that are designed to enable those results (as discussed in topic 5).

A review of research examining the relationship between organizational culture and innovation found that leadership style influenced the nature of this relationship to the extent that it led to increased organizational performance (e.g. economic growth, goal achievement, customer satisfaction) (Sethibe and Steyn, 2016). The systematic review undertaken by Sethibe and Steyn (2016) found that organisations could improve their overall performance by:

1. taking a relational (i.e. participatory and human-focused) approach to leadership (leader as coach); and

1. facilitating an organizational culture that supports innovation through individual coaching and facilitating collaboration to enhance team performance.

Hess, E (2016). Who will lead in the smart machine age? Forbes. Available online at: https://www.forbes.com/sites/darden/2017/02/07/who-will-lead-in-the-smart-machine-age/#4d556b3e39fa

Hess, E. (2016). Leadership in the smart machine age. Available online at: https://ideas.darden.virginia.edu/2016/09/leadership-in-the-smart-machine-age-the-4es/

Ethics and Change Management

The founder of modern business theory, Adam Smith, defined himself as a ‘practical philosopher’ and some interpretations of his work argue that he suggested people approach the market with empathy and a philosophical mindset (as opposed to self interest which is the popular interpretation of Smith’s contribution to economic thinking) (Huehn, 2016). In other words, Smith argued that anyone ‘doing business’ should do so ethically and with curiosity. Scholars who respect Smith’s thinking argue that modern management theory has adopted the economic ‘truths’ of rationalism and empiricism at the expense of taking a philosophical and ethical approach to the development of the economy and the organisations that operate within it (Huehn, 2016).

Learning has been replaced by knowing; wisdom by cleverness. Students' (and professors') minds are closed as they assume to possess "settled" knowledge that entitles them to lead others who have not been given these final truths (Mintzberg, 2004, p. 74). They have lost the all-important "anxious curiosity" (Smith, 1982, p. 40) that drives progress in any discipline (Huehn, 2016, p. 171).

In his famous New York Times essay Milton Friedman (1970) wrote that values have no place in business and that anyone talking about values would be preaching "pure and unadulterated socialism", which in the cultural and historical context of the time, was interpreted as promoting the idea that ‘value-based business is unethical” (Huehn, 2016).

We live in an era where organizational leaders are rewarded for putting their own egos and self-interests ahead of the interests of the many, often with disastrous results and consequences (as highlighted by the examples mentioned in lesson 1). As Stiglitz (2010) observed of the 2008 Global Financial Crisis, the short-term performance incentives of mortgage salesmen, of the investors and purveyors of complex and ill-understood financial instruments and of the corporate leaders who were supposed to supervise them were not aligned with the long-term interests of the institutions for which they work. That is to say, the long-term, sustainable interests of the many are sacrificed to the short-term greed and arrogance of the few (By, Burnes and Oswick, 2012, p.3).

According to Barker (2001, p. 491), ‘leadership is all about change’ and no

change is value free (Macleod and By, 2009). This suggests that in the context of constant change resulting from innovation and digital disruption, managers will need to be very clear in being able to communicate, defend and uphold the values underpinning their organizational objectives. Indeed, Burnes and Jackson (2011) argue that all approaches to leadership and change are bolstered by a set of ethical values that influence the actions of leaders and determine the nature of the impact (i.e. positive or negative) of change initiatives.

Barker (2001) also states that leadership is ‘a process of transformative change where the ethics of individuals are integrated into the mores of a community as a means of evolutionary social development’ (p. 491). Emerging leaders must be expected to make decisions in the interest of the many rather than the few and be held accountable to both employees and external stakeholders alike. Neither society nor the environment can sustain any longer the abuse of power and freedom that has accompanied corporate leadership since the industrial revolution. Widespread human-focused, ethical and value-based change is absolutely necessary if we, as a society, are ever to address the wicked problems we currently face.

As Franklin D. Roosevelt (1937 cited in Gentlin, 2016) stated regarding the causes of the Great Depression of the 1930s:

We have always known that heedless self-interest was bad morals; we know now that it is bad economics. Out of the collapse of a prosperity whose builders boasted their practicality has come the conviction that in the long run economic morality pays.

Traditional approaches to economic development and organizational management and leadership are no longer sustainable. We need to innovate the way we do things, including the way we structure and run our organizations. There are many examples of both emerging and established organizations that are attempting to bridge the gap between business activity and social good. These organizations are embracing a ‘human-centric approach to problem solving grounded in human-needs, insights and ingenuity’ (Fabian and Fabricant, 2014). One example of an organization intentionally designed around an ethical framework based on the value of sustainability is RapidPro – a flagship, open-source platform for moving information quickly using mobile phones. RapidPro is an innovation arising from a series of Innovation Labs set up by UNICEF within the growing constellation of tech hubs in the developing world. “One of the reasons that UNICEF set up labs was to create a way to engage problem solvers in a space where problems are not just about a better product or single-pointed solution, but also about systemic changes that run from individual to community to national government and beyond” (Fabian and Fabricant, 2014).

This is only one example of the ‘rising tide’ of interest from organisations to move beyond traditional product innovation and have a direct impact on the causes of poverty and epidemic ill-health in both developing and developed economies.

A framework for discourse and collaboration, and a shared ethics around approach, are necessary to make certain that there is a common vision and that great innovations can have the best impact on the world’s most marginalized populations (Fabian and Fabricant, 2014).

Fabian, C. and Fabricant, R. (2014). The ethics of innovation. Stanford Social Innovation review. Available online at: https://ssir.org/articles/entry/the_ethics_of_innovation

EBM Spotlight: Ethics and performance

Drawing upon the EBM capabilities that you developed in the Evidence-Based Practice in Management course, we would like you to gather some stakeholder evidence on the importance of ethics to the development new products and services. Ask five friends, colleagues or family members to explain how ethics impacts on their willingness to buy from or use the services of different companies or organsiations.

Hint: it may be helpful to provide your stakeholders with an example of an unethical business practice (e.g. child labour) and ask if they have heard of any other examples and if this information has impacted on their choices as consumers or potential clients?

Activity: Lesson 2

Activity:

If you haven't already done so, please read the article associated with the mini-case at the beginning of this lesson. In the interview presented in this article Gerd Leonhard says we should embrace technology but not become it, because technology is not what we seek, it's how we seek…. What we need is human stewardship that masters the transition into this new machine age. Please keep this statement in mind in considering your responses to the following questions:

Question #1: Please explain, in your own words, what Gerd Leonhard means when he says that we need human stewardship to help us transition into the machine age.

Question #2: Imagine you are a human resource manager in an industry on the verge of a major digital disruption – do you advise the CEO of your company to spend money on research and development that could have the potential to mitigate the disruption or do you suggest that funds should be allocated to provide training to employees to help them prepare for the disruption? Please explain your answer.

Question #3: If you are a manager in a company 50 years from now and have two potential employees to choose from, a young graduate who has embraced trans-humanism and has implants that enhance their data processing and analytical skills; and another, 100% natural human with 15 years experience in the industry – which one do you choose? Why?

Introduction: Lesson 3

Public pressure to address negative corporate externalities, and pressing social, economic, and environmental issues has provided the impetus for the evolution of business practices such as triple-bottom-line accounting, corporate social responsibility, and frameworks for sustainability. With the democratization of information and increased public attention on corporations and their senior leaders, the question is no longer if companies have a responsibility to society, but how they should address it. This topic will examine whether a sustainability framework has the potential to address stakeholder expectations in a way that can benefit both the business and society.

Mini-case: Interconnectivity as the key to sustainability

In this mini-case Jon Alexander shares his views on the ‘consumer society’ and challenges the assumption that it is possible to achieve sustainability while people still see themselves primarily as consumers rather than global citizens. In this video Jon asks us to reflect on when we are consumers and when we are citizens and reminds us that we, as individual citizens, have the power to think our own thoughts.

Is global sustainability possible in our society? | Jon Alexander | TEDxUCL - https://youtu.be/Mor2CZj3KZQ

Alexander, J. (2016). We need to harness everyday creativity to create a better society. HuffPost UK. Available online at: http://www.huffingtonpost.co.uk/jon-alexander/creativity-better-society_b_10480450.html

Alexander, J. (2014). As the web comes of age, will it herald a new democratic ear or just distract us from deepening crisis? HuffPost UK. Available online at: http://www.huffingtonpost.co.uk/jon-alexander/as-the-web-comes-of-age-will-it-herald-a-new-democratic-era-or-just-distract-us-from-deepening-crisis_b_4946576.html

Case Question

In the mini-case video Jon Alexander describes how consumerism has taken over many aspects of our thinking, from how we respond to our neighbour’s choices to how we vote in democratic elections. But he also points out that we have a choice, we can use our connectivity through the World Wide Web to engage actively in the debate about what to do about the big problems (climate change, poverty, hunger), to offer suggestions, ideas and create possibilities through connecting with likeminded people. Or we can use the power of social media and other technological innovations to let social media influencers do our thinking for us and tell us what pair of shoes to buy next. We would like you to do some research on organisations that use social media influencers by searching on company websites and on social media that you currently use.

>> Based on your research, do these organisations support the view of the individual as consumer or is there evidence to suggest they also see people as citizens?

Theory: Organizational Responsibility: Society & the Environment

The classical view of management states that a manger’s only responsibility is to maximize profits for the business. Some people still hold this belief. However, increasing numbers of individuals and organizations now hold the expectation that managers will be first and foremost, socially and environmentally responsible. Whereby, it is anticipated that a manager’s intention, beyond that which is required by law or regulation, will be to pursue goals that are good for society and the planet, not just for business.

Sustainability: Measurement and reporting

Sustainable development assumes that, as a society, we can continue to develop and can do so sustainably so long as we engage in practices which do not deplete natural resources to the point that they will not be available for future generations. Sustainable development business practices manage social and technological processes to make balanced and equitable progress on economic, environmental and social needs so that meeting these needs in the present does not compromise the ability of future generations to meet their own needs (Samson and Daft, 2009). The accounting for sustainable development practices sometimes comprises simply of a number of checklists or bullet points regarding the activities an organization is involved in. These lists usually fail to make any connection between the organizational business strategy, performance and issues regarding social and environmental sustainability (Samson and Daft, 2009). As a result investors and stakeholders are often poorly informed on a company’s performance on sustainability measures.

However, as more organizations ‘go green’ there has been an increase in the production of detailed sustainability reports in response to shareholder demands for information. Many organizations use the guidelines developed by the Global Reporting Initiative (GRI). The Global Reporting Initiative is an international independent standards organization that helps businesses, governments and other organizations understand and communicate their impacts on issues such as climate change, human rights and corruption.  Of the world's largest 250 corporations, 93% report on their sustainability performance and 82% of these use GRI's Standards to do so (from the GRI website: www.globalreporting.org). On this basis, it appears that organisations around the world are increasingly embracing their responsibility to respect and protect the natural environment.

Social responsibility

Social responsibility is the ethical imperative to make decisions and act in ways that have a positive impact on society. This construct is distinguished from social responsiveness, an organization’s capacity to adapt to social norms and values and make practical, financially oriented decisions about whether or not to adapt to these changes in society. Managers regularly face decisions that require a consideration of social responsibility in pricing products and services, product quality and safety, resource allocation, use of natural resources, consumption of goods and energy and big-picture decisions such whether do to business in a country that is seen to violate human rights.

In addition to these questions, managers also have to tackle considerations such as an organization’s impact on the natural environment, which from an economic standpoint, might present a significant dilemma. Widespread recognition of the need for ecologically sustainable management practices has arisen as a result of increasing levels of public and organizational awareness about the damage to the environment caused by the combined effects of capitalism and consumerism. Managers and business leaders are now expected to have a clear and complete understanding of the cause and effect relationships between organizational actions and environmental outcomes and be not only responsive, but take responsibility for the ecological impact of all company decisions (Senge, Smith, Kruschwitz, Laur and Schley, 2010).

In their 2010 book The Necessary Revolution, Peter Senge and his fellow authors write: tapping and developing the potentials of people and organizations to create the future rather than react to the present rests on two foundations that have always been at the core of our work on organizational learning: visions for the future and an understanding of the present reality (p. 51).

This present reality for new and emerging managers is one of ethics and responsibility, innovation and sustainability. Some organizations adopt socially responsible and sustainable business practices in reaction to regulatory demands or public pressure, however once an organization makes a public commitment of this nature, the public will hold them to it (Senge et al., 2010). They will also Tweet about it, comment on it on Facebook and follow the suggestions of social media influencers regarding whether or not to engage with the business, their products or services.

However, regardless of why an organization adopts sustainable business practices, most find that the opportunities and benefits of a sustainable business framework address, not only ecological concerns, but concerns about the sustainability of the business itself. Once the ethos of sustainability reaches those responsible for resource and budget allocations, supply chains, research into new markets, core operations and research and development, it has become an integrated strategy affecting all aspects of the organization (Senge, et al., 2010). From this point in an organization’s evolution sustainability is no longer about compliance or giving in to public pressure, but rather it is assimilated into the organization’s identity, it influences workplace culture and gives a heightened sense of meaning and purpose to the work of the employees.

Responsibility and the Future of Management

Reduced operating costs and improved brand image are nice economic benefits to operating within a sustainability framework, however a vision of the future in which your organization has helped to ‘make the world a better place’ is fast becoming the expectation of all organizational stakeholders; internal, external and shareholders alike (Senge, et al., 2010).

From the perspective of sustainability, management isn’t about following rules or procedures, it is not about ensuring regulatory compliance or reacting to perceived risks. It is about thinking well, acting ethically and actively helping to shape the day to day reality of employees to enable them to see interdependence between organizations and society, people and the environment, and the cause and effect relationships between actions and outcomes.

In the current context of constant change, volatility, uncertainty, complexity and ambiguity, management has evolved. No longer is it sufficient to simply demand efficiency and effectiveness form employees. As we prepared for the digital disruption of the fast approaching smart machine age we can look around and discover that management is currently about bringing out the best in people, about designing cultures for innovation that contribute to the social good and have a positive impact on our social evolution.

Sustainability, Innovation and Entrepreneurship (opensource text) – Chapter 3. Please find online at: https://saylordotorg.github.io/text_sustainability-innovation-and-entrepreneurship/s07-01-evolutionary-adaptation.html

Chapter 4.2 Systems thinking: https://saylordotorg.github.io/text_sustainability-innovation-and-entrepreneurship/s08-02-systems-thinking.html

EBM Spotlight: Sustainability Frameworks

There are a number of commercially available frameworks for integrating sustainability into a corporate strategy or business plan. Some of these include: the Global reporting Initative, the Natural Step, Triple Bottom Line, Environmental Footprinting, and Ecosystem Services. Drawing upon the EBM capabilities that you developed in the Evidence-Based Practice in Management course, we would like you to do some research into ONE of these frameworks and provide an analysis of the framework, including a discussion of the approach and the underlying assumptions of the framework.

Activity: Lesson 3

Activity: Sustainability reporting

One of the main challenges with determining how well organisations are addressing their social responsibility is the level of non-reporting in this area. While some organisations take their social and environmental responsibility very seriously and leverage the benefits of good sustainability reporting for enhancing the company’s public reputation, other organisations are not yet seeing the benefits of engaging in this practice beyond basic regulatory obligations.

In this activity we would like you to access a document prepared by the Australian Council of Superannuation Investors (ACSI) – Corporate Sustainability Reporting in Australia (2017) [https://www.acsi.org.au/images/stories/ACSIDocuments/generalresearchpublic/2017-Sustainability-Report-FINAL.pdf]. Based on your reading of this document, please respond to the following questions:

Question #1: From a shareholder point of view (as presented in this document) what are the benefits of reporting based on a sustainability framework?

Question #2: If you were a member of the ACSI would this report outlining the level of sustainability reporting by ASX200 companies influence your investment decisions? Please explain your answer.

Question #3: On page 18 of the report the ACSI state that three ASX100 companies were ‘downgraded’ to ‘no reporting’ and that the Council contacted the companies to convey their disappointment. If you were a CEO receiving this communication, how would you respond? Would you change your reporting framework? Would you think more carefully about sustainability?

Question #4: Knowing that there are shareholder groups such as the ACSI and other stakeholders monitoring your performance, would this change your decisions as a manager with regard to sustainability and other aspects of social responsibility? Please explain your answer.

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