P2 Explain the implications for the business and stakeholders of a business operating ethically...
It is clearly that businesses fallow their code of ethics, which comes with different policies etc. Organisations with high standard of ethics like BAT are keen to publish the ethical goals achieved each year. However that ethical goals are proudly published in the web site of the company. The reasons are many but it has to be known well organised ethically company is more likely to get place in one of the best companies prefer by experts who want to work for it and customers who will be happy by choosing the brand.
Well known image and good reputation can be gain towards good ethical values, which could be achieved only by setting up ethical aims. However good ethical image is volunteer option chosen from the company, however BAT gain lot of benefits which are long term. Likely like shareholders, the business invest in ethical principles and in time it start getting benefits such as:
Being Responsible is the main aim of ethical aims and objectives, this is also the techniques used in order to create responsible image. The image itself is the company brand, but the brand is represented by the employees working for it. Managing employees working in ethical way will increase the number of staff being responsible.
There is a fact saying that 79% of the CFOs believe in Environmental Social Governance, which programme is to add value to the businesses such as BAT in creating good corporate brand and reputation. Resposibible company starts it basis by creating responsible leadership, which is done by the very top positions such as directors and passed down through the hierarchical structure to the operatives. Leaders are aiming to create ethical thinking in its employees and when recruiting chose to have people with already having set certain point about it.
It is well known that human being are influencing negatively some point of the Earth environment so there are companies trying to support to keep the environment well-functioning for longer. Those companies like BAT are focusing on Micro-sustainability, which is to help the environment by setting up behaviour modification. One of modification could be ‘’smoke less and reduce CO2’’. However the company invests in different campaigns related to Green Planet, Clean Water and Air, which is done by e.g. recycling products. BAT keep transparency of such ideals and help people to understand besides salaries, what is the other thing they are working for. BAT knows that financial bottom line is not enough to attract employees and stakeholders to be part of BAT. After all out there are many other companies that are huge and working towards building a better place for us.
Employees & Future Workforce is the benefits that ethics brings with it over time. BAT get involved with people who are impressed of the mission, value and brand image of the company and also highly satisfied of the profit features that company comes up with every year. The business achieve that by putting in responsible business procedures to help BAT grow increase good working staff. The other benefit which is optional is once the staff is involved with BAT to hold on to it and keep the standards of high performance from the best qualified people.
The rest of the macro benefits, which come to employees are motivation, high productivity, recruiting the best from the best, staff satisfaction, retention in some point, last but not least engagement and loyal from employees.
75% of the employees are paying attention to environmental protection and sustainable development exhibit high level of commitment. The opposite way shows again big figure of 52% staff working for companies thinks that organisations possess inadequate corporate responsibility policies demonstrating low level of commitment. Considering the statistic above BAT must select carefully their staff.
Operational Effectiveness is all about making sure the ethical plans and strategies that BAT consider and invest in will bring them the expected effects from it.
A statistic shows that in 2010 only 45% of respondents cited this as important to corporate reputation, another 64% cited good corporate citizenship and 83% cited transparent and hones practices as important to corporate reputation one of which is the BAT itself. The las figures could clearly shows the out there are companies that really believe in ethical way of practice and that it could make them lot of profit, from the other hand get them large place on the share market, leading with it lots of other benefits. Public should be thankful to companies that invest for those reasons in our world, trying to make it better looking, better feeling and last for longer. Other statistic above shows that more than half of the people on this planet appreciate that. Building a university will give people dreams and satisfaction of prosper however the long term benefit will be BAT getting qualified people to become operative in their large business, which is only one example of how organisation can benefit in more than one way from certain investment, counted as ethical action.
There is a statistic published by BITC that states; 3000 managers identified operational effectiveness as a business benefit. This is something that people should believe in and work towards it, the effects will come after the investment in better practices, which wouldn’t come without believing in the theory itself. Some of the benefits that will come are better innovation of business models and procedures and there are 15% who agree. Now that’s good in a way as every company must work on improvements, there is always something new, even some managers have their own way of setting an operation of innovative work procedure. Reduced costs could be done by recycling parts of the products, try to create cheap plastic materials which are self-distrustful in time and also bring recycling bins and manage their use by getting raw material for their new creations. That will work in both clean eco model and also cost saving, for which 25% agree to that. Better innovation of product service offerings, which BAT works on hardly, trying to create less harmful products including less CO2 emissions, and 17% agreed to that.
Risk Reduction & Management is the actual plan how BAT could work out a strategies, which will reduce the negative impact and hardly but at some point increase the positive impact in terms of product/production impact. A statistic shows that 18% of the business leaders survived for the 2011 towards improving regulatory compliance as one of the greatest business benefits in add resign sustainability and 14% cited reduction risk. Now, the statistic itself works in very complicated way which wouldn’t be discussed now, however there are interesting points such as risk reduction from BAT to their employees and working premises also consumers of their production. In order to do that the company give chance to employees talk, they are allowed to give their concerns and what could be improve in terms of harm reduction. There are some national standards requiring companies to work on risk reduction management however BAT is targeting higher than the expected. The company creates very save environment and since the beginning of tobacco products stated production until now the business improved the products by reducing the level of raisins and tar.
Direct Financial Impact is referring benefits that affect financial performance in straight way. Cost saving is one of the general impact, by recycling rather than creating every time from raw material. Environment protection is another way of saving costs, business might pay less taxes in a way as they invest in hospitals, reduction of Co2 and so on. Sustainable manufacturing and proactive employees are another benefit that will impact in direct way the financial flow in positive way.
Organisational Growth is impacted from factors mentioned all above, the company creates a good working Sycle in terms of internal and external benefits which leads to company’s growth. BAT is known as the most ethical orientated company, which won many awards that other tobacco company’s never had the chance for that. The companies like BAT have the chance to get best from the best employees ever, protective, cooperative, clever and ethical in a way. Those employees can make and they are making the BAT very large organisation operating in countries with the heist tobacco consummation. The research shows that 3000 managers identified operational effectiveness as a business benefit in terms of creating innovative products and innovations within the business, one of which could be the reduction of materials waste.
Business Opportunity is another benefit of organisational growth, as many countries BAT operates in will help decreasing the percentage of unemployment. Many Asian and African countries are with high percentage of unemployment. However this is not all, BAT invest in education and give people the chance to become part of the BAT family. Training and working in ethic centred way will grow smart heads for future business success. BAT is a chance but also a dilemma between supporting peoples nicotine needs and giving opportunity for non-smoking to start. However the company is very strong with good basis, making good things coming from the company, taking under shadow the negative.
Bibliography: Statistics for each topic were provided by www. BITC.com