Emerging Business Themes Essay

A- QUESTION 1 1- Definition Business ethics is a form of professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. The definition of Ethical stance defined by Johnson and Scholes as: ‘the extent to which an organization will exceed it minimum obligations to stakeholders and society at large. There are four possible ethical stances existing and are stereotypes for any organization.(1) The first ethical stance is short-term shareholder interests; a company who stick very close to laws and regulations which are in place. They give and do only what they are obliged to, this usually causes problems with long-term financial decisions. The second stance is longer-term shareholder interests – a company who are very focused on building and maintaining reputation in relation to its financial success. They take into consideration all stakeholders and how they can affect the organization in the future. The third stance is multiple stakeholder obligations – relating to a company taking wide consultation with all stakeholders. This is a very slow process and not a good stance for a fast moving and growing company. The last stance is shaper of society – companies who focus on communities and want to build them up; this stance puts the financial interest second and is usually related to charitable organizations. 2- Ethical Dimension to Corporate Decision Making Ford Motor Company is one of the competitive motor companies in the world. In 1970s, the compact car Ford pinto, became a famous for its tendency in rear-end collisions to leak fuel and explode into flames. More than 20 people were killed or injured before the Ford Motor company issued a recall to correct the problem. The decision process behind the Pinto’s launch revealed that under intense competition from Volkswagen and other small car manufacturers, Ford has rushed the Pinto into production. Ford’s engineers had discovered the potential danger of ruptured fuel tanks in crash tests, but the assembly line was ready and Ford’s leaders decided to proceed. This is an evidence of greed, callousness and unethicality. (2) Looking to their decision, it take into account a growing understanding on how cognitive biases distort ethical decision making, and come to a different conclusion. In our mind, the executives involved in the Pinto decision, were making an unethical choice. It is because they thought of it is as purely a business decision rather than an ethical one. The problems are already highlighted to Ford’s leaders, but, in those days, safety was not popular in Ford. Problem meant delay on a Pinto. Production must go to achieve sale target. We don’t believe that Ford’s leaders or executive in charge were consciously unethical or intentionally sanctioned unethical behavior by people further down the chain of command. After decades, the Ford Pinto case has allowed us to dissect Ford’s decision-making process and apply the latest behavioral ethics theory to it. The pattern of evident continues to recur in organizations. It is diverted the Ford’s Executives’ attention from the ethical dimension of problem, and executives today are swayed by similar forces. (2) To overcome all the problems, Ford Motor Company has a program to guide compliance with Ford Policies and Directives. Ford compliance program is reviewed by a senior management compliance committee and the Audit Committee of the Board of Directors. The program raises awareness of the Company’s commitment to defines corporate practices through Policies and Directives, ethical practices, ensure an infrastructure that allows for the reporting of Policy violations or business-related legal violations through a number of avenues worldwide, conducts risk assessments, oversees the investigation of such reports and education on key legal and provides training and ethical risk areas. The Handbook outlines requirements for its employees and those working on behalf of the Company and provides background resources for a wide range of business-related situations, including: (3) 1- Workplace environment 2- Gifts, favors and conflicts of interest 3- Use of Company assets and data safeguarding 4- Integrity of financial records 5- Product quality, safety and environmental matters 6- Intellectual property 7- Working with governments (political activities) 8- Competition and antitrust laws 9- International business practices References: 1-Wikipedia- http://en.wikipedia.org./wiki/Business_practices 2- Max H. Baseman And Ann E. Tenbrunsel – Harvard Business Review April 2011- http://hbr.org/2011/04/ethical-breakdowns/ar 3- Ford Motor Company- Fordmotorcompany.com -report 2008/2009 – http://corporate.ford.com/microsites/sustainability-report-2008-09/governance -sustainability-ethical B- QUESTION 2 1-Climate Change – Ford Motor Company. In 21st century, climate change is the most important global political and business issues. It will have a huge impact of the world and threaten livelihood of millions of people in the world. Every years, average temperature in artic have risen twice, increasing emissions of greenhouse gases. Climate change is the result of an increase in heat-trapping (greenhouse) gases in the atmosphere. Carbon dioxide (CO2) is the major long-lived greenhouse gas (GHG). The burning of fossil fuels (to provide electricity, heat and transportation, and to support industry and agriculture), as well as deforestation, leads to net emissions of CO2 and increased levels of atmospheric CO2. The atmospheric concentration of CO2 has increased from a preindustrial level of 270–280 parts per million (ppm) to a level of approximately 392 ppm in 2012. (4) Ford Motor Company have a holistic view of climate change and have addressed non-CO2 long-term greenhouse gases such as hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), nitrous oxide (N2O) and sulfur hexafluoride (SF6). Through its Restricted Substance Management Standard they have prohibited SF6 in tires in magnesium casting. They were continuing their scientific research to determine the relative contribution of a wide range of long-lived greenhouse gases to radiative forcing of climate change. (4) 2-Ford’s Greenhouse Gas Emissions Ford has estimated that their total CO2 emissions are in the range of 350–400 million metric tons (Mmt) per year, varying over time with fluctuations in vehicle production and sales, on-road fleet size and vehicle miles traveled. The estimate includes emissions from its facilities, emissions from current-year vehicles and emissions from all Ford vehicles on the road. (4) 3-Climate Change Risk and Opportunities In 21st century, concerns about climate change, the energy security and price of fuel, along with the global recession, have changed the automotive business. This creates substantial risks for automakers but also opportunities for innovation that enable growth and expansion. Below, the general trends driving change in Ford’s markets and take a closer look at several key markets. Also discuss the physical and supply chain risks to its business posed by climate change. (4) Ford’s Markets – Price of fuel, consumer interest in smaller and more fuel-efficient vehicles and energy security concerns are also a driver of fuel economy regulation and alternative fuel development. – All of Ford’s major markets are increasingly shaped by government actions to regulate fuel economy and carbon dioxide emissions, provide incentives to shift consumer and introduce low-carbon fuels and business behavior. Some of governments are also actively involved in development, promoting the research, battery technologies and purchase of new vehicle. – Greater concern from Investors about climate change as a material risk. Providing climate-change-relevant information to investors and shaping its business strategy with climate change in mind are important elements of maintaining access to capital. – Product globalization strategy – respond to changing markets, regional preferences, opportunities and the risks presented by the climate change issue. Ford has created global vehicle platforms that offer superior fuel economy, safety, quality and customer features. (4) 4-Physical Risks Climate change raises the potential for shifting patterns of extreme weather and other risk to Ford’s facilities. For insurance, Ford assesses the risks each of their facilities faces at least once a year. This risk assessment is updated and takes into account the risk of exposure to storms, hurricanes, earthquakes and flooding. (4) 5-Supply Chain Risk Ford suppliers located in more than 60 countries, regulatory and physical risks as a result of GHG regulation and the impacts of climate change. These risks could affect their competitiveness or ability to operate, creating the potential for disruptions to the flow of supplies to Ford. (4) 6-Ford Climate Change Strategy Ford’s long-term strategy is to contribute to climate stabilization by: †¢ Continuously reducing the greenhouse gas (GHG) emissions and energy usage. †¢ Working with industry partners, energy companies, consumer groups and policy makers to establish an effective and predictable market, policy and technological framework for reducing GHG emissions. †¢ Develop the flexibility and capability to market lower-GHG-emission products. (4) 7-Product Sustainability Process -Science – Stabilization approach Technology plan -Government – regulatory trendsproduct CO2 strategy Policy position -Consumer- market trends Cycle plan -Competitive- industry trends Marketing and Communication plan 4- Ford Motor Company – http://corporate.ford.com/microsites/sustainability-report-2011-12/environment-climate-risks C- QUESTION 3 In 21st century business challenge and difficult global trading conditions, good relationship with several groups of stakeholders such as employees, customers, dealers, suppliers, investors and communities are very important. 1- Ford Motor Company Stakeholders. Through internal analysis and developing sustainability programs, Ford has interdependent relationship with a few categories of stakeholders such as employees, customers, dealers, suppliers, investors and communities, also its relationship to ‘society’ which includes government agency, NGOs and academia. (5) 2- Employees Employees are the most valuable resource. In 2011, Ford employed more than 164,000 individuals at 73 plants, 41 distribution warehouses, 106 sales offices worldwide and 57 engineering research/development facilities. All of the hourly employees in its automotive operations in the U.S. and also its subsidiary outside U.S. are represented by unions and covered by collective bargaining agreements. Unions are key partners with Ford in providing a productive, safe and respectful workplace. Ford faces workplace health and safety challenges such as; establishing and reinforcing high, common expectations for the safety of their employees worldwide. Most of their manufacturing facilities have joint union/management safety committees that guide the development and implementation of safety programs. (5) ONE Ford plan aligns its efforts toward a common definition of success: having ONE Team, ONE Plan and ONE Goal for an exciting, viable Ford that delivers profitable growth for all. (5) †¢ F: Foster Functional and Technical Excellence(5) †¢ O: Own Working Together(5) †¢ R: Role Model Ford Values(5) †¢ D: Deliver Results(5) 3- Customers Ford Motor Company serves more than 5.5 million customers worldwide. Ford’s customers are the most important stakeholder. Their major regional markets include South America, North America, Eastern Europe, Western Europe, Russia, Australia and Asia. In some regions, Ford serve 3 types of customers- individual retail consumers, small business customers and large commercial fleet customers. It will continue to expand products and services for these existing customers while working simultaneously to gain new customers in emerging markets. In North America and Asia, they are focusing on increasing their offerings of smaller and more fuel-efficient vehicles. (5) 4- Dealers Dealers are the face of Ford to its customers and communities, the key employers and contributors to local economies. Dealer sustainability program has launched in 2010, a voluntary sustainability initiative for dealers to reduce their carbon footprints and improve the energy-efficiency of their dealerships. The goal of the â€Å"Go Green† Dealer Sustainability Program is to collaborate with dealers to implement cost-effective ways to improve the energy-efficiency of their facilities. It partnered with the Rocky Mountain Institute, a leading energy-efficiency organization, to pilot new technologies and architectural design principles. (5) 5- Suppliers Ford relies on more than 1,400 production suppliers to provide parts that are assembled into Ford vehicles. 9,000 supplier companies provide a wide range of nonproduction goods and services, from industrial materials to computers to advertising. Ford and its suppliers work jointly to deliver great products, have a strong business and make a better future. In today’s economic environment, achieving lower costs and improving quality require an unprecedented level of cooperation with suppliers and the maintenance of strong supplier relationships. (5) 6- Investors The success of Ford as a company directly affects its 162,000 investors, and they have been focused on improving Ford’s financial health. Provide information and interact regularly with investors through corporate website, annual report and regulatory filings and annual meeting. They also engage with socially responsible investment organizations that are seeking information to use to evaluate its sustainability performance. These interactions help Ford stay abreast of and respond to investor concerns. (5) 7- Communities Ford Motor Company impacts the communities in numerous ways, provide the employment, the taxes, the environmental and safety performance and support and participate in civic life. The communities are composed of a range of groups and individuals, include its customers, employees, business partners, government regulators, community organizations and members of civil society, and individuals who live and work around its facilities. Ford has been supporting community more than 100 years ago. This includes helping feed hungry people, providing mentors in classrooms and teaching teenagers to drive more safely. Changing of Fundamental have been happening including increased competition globally and changing markets for its products, with future sales growth expected to occur in emerging economies. Ford is expanding sourcing in these lower-cost emerging markets, as a way to serve both local markets and the global supply chain. Ford seeks to respect and make a positive contribution to its host communities. (5) 5- Ford Motor Company – http://corporate.ford.com/microsites/sustainability-report-2010-11/society-stakeholders D- BIBILIOGRAPHY 1-Wikipedia- http://en.wikipedia.org./wiki/Business_practices 2- Max H. Baseman And Ann E. Tenbrunsel – Harvard Business Review April 2011- http://hbr.org/2011/04/ethical-breakdowns/ar 3- Ford Motor Company- Fordmotorcompany.com -report 2008/2009 – http://corporate.ford.com/microsites/sustainability-report-2008-09/governance-sustainability-ethical 4- Ford Motor Company – http://corporate.ford.com/microsites/sustainability-report-2011-12/environment-climate-risks 5- Ford Motor Company – http://corporate.ford.com/microsites/sustainability-report-2010-11/society-stakeholders