Page 93 - Fundamentals of Management Myths Debunked (2017)_Flat

92 Part 1 • Introduction
21
organization’s primary stakeholders had a negative effect on shareholder value. Despite
sustainability
A company’s ability to achieve its business goals all these concerns, after reanalyzing several studies, other researchers have concluded that
and increase long-term shareholder value by managers can afford to be (and should be) socially responsible. 22
integrating economic, environmental, and social
opportunities into its business strategies
What Is Sustainability and Why Is It Important?
Being green at the world’s largest retailer

• $482.2 billion in revenues
• 2.2 million employees
• 11,400+ stores

sustainability goal:
Remove 20 million metric tons of greenhouse gas emissions from supply chains—the
equivalent of removing more than 3.8 million cars from the road for a year.

Yes, we’re talking about Walmart. And considering its size, Walmart is probably the last com-
pany you’d think of for being highlighted in a section describing sustainability. However, Walmart

has committed to improving its sustainability efforts. In fact, it now reuses or recycles more than
23
80 percent of the waste produced in its domestic stores and in other U.S. operations. This cor-
porate action affirms that sustainability has definitely become a mainstream issue for managers.
We introduced you to sustainability in Chapter 1 as we discussed factors reshaping manage-
ment in today’s organizations. Just a refresher: We defined sustainability as a company’s ability
to achieve its business goals and increase long-term shareholder value by integrating economic,
24
environmental, and social opportunities into its business strategies. Organizations are widening
their responsibility not just to managing in an efficient and effective way, but also to responding
25
strategically to a wide range of environmental and societal challenges. Like the managers at
Walmart (and others committed to being sustainable) are discovering, running an organization in
a more sustainable way means making informed business decisions based on thorough and ongo-
ing communication with various stakeholders, understanding their requirements, and factoring
economic, environmental, and social aspects into how they pursue their business goals.

Seventy-five percent of workplaces have at least
one green technology practice. 26

The idea of practicing sustainability affects many aspects of business, from the creation
of products and services to their use and subsequent disposal by consumers. (Check out Case
Application #2 on Keurig Green Mountain Inc. at the end of the chapter.) Following sustainability
practices is one way in which organizations can show their commitment to being responsible. In
today’s world where many individuals have diminishing respect for businesses, few organizations
can afford the bad press or potential economic ramifications of being seen as socially irrespon-
sible. Managers also want to be seen as ethical, which is the topic we’re going to look at next.

What Factors Determine Ethical and Unethical Behavior?

• Employees at a law firm in Florida that handled foreclosures for Freddie Mac and Fannie
3-3 Discuss the Mae changed thousands of documents and hid them when company officials came to con-
factors that lead duct audits. 27
to ethical and • A Paris court found Jérôme Kerviel, a former financial trader at French bank Société
Générale, guilty of triggering a massive trading scandal that created severe financial
unethical behavior problems for his employer. Mr. Kerviel claims that the company turned a blind eye to his
in organizations. questionable but hugely profitable methods. 28