Apusco is an indigenous multinational mining company which undertakes a wide range of mining projects around the world. Apusco has to work with many other organisations and governments agencies in order to manage pollution and protection of the environment. Apusco’s mission statement states that ‘The basis of our company is built on the values of conducting business in a socially responsible and ethical manner. We respect the law, protect the environment and embark on developmental projects in the community.’
Apusco’s values are included within its Ethical Code of Conduct. Apusco places high emphasis on its ethical and sustainable business practices. It involves employees, suppliers, and the members of local communities in which it operates in its strategic management processes. All these stakeholders are fully trained by Apusco in the Ethical Code of Conduct and they are expected to adhere to it.
Required:
Discuss FIVE (5) importance to Apusco for incorporating business ethics and sustainability into its strategic management activities. (10 marks)
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- Improving corporate image/reputation/brand loyalty – Strong ethical principles that go beyond upholding the law can add value to Apusco in terms of improving its brand. Failure to act ethically can cause social, economic and environmental damage and undermine Apusco’s long-term survival. Being such a large, multinational organisation, Apusco’s ability to demonstrate strong ethical principles across its whole organisation will help to sustain its future viability. Ethics must be embedded in its business models, organisational strategy and decision making processes.
- Often organisations which adopt strong ethical approaches will also see an improvement in profitability. Although this may not be the main driver for Apusco, it is a consideration in a highly competitive global marketplace.
- By having a range of suppliers which Apusco has trained in its ethical ways of operating, it is investing in the future and can work with them on repeated projects globally. This will tie these suppliers into Apusco and provide a stable working relationship which will deliver cost savings in the long-term. This is a complete contrast to many companies which operate a short term focus and change suppliers regularly or which are let down by non-delivery or poor performance of its sub-contractors. Apusco should not experience these problems and should gain a better reputation with its customers for on time delivery and good quality of work. All suppliers (services and products, such as building materials) will be at the standard that Apusco expects and requires as it has established a good working relationship with the companies it works with. Also, by being ethically responsible, Apusco can reduce its cost by avoiding fines and law suits as well as payment of compensations which are associated with being ethically irresponsible.
- The ethical tone has to come from the top of the organisation. Therefore, it is at a strategic level that the ethical tone is set. The senior managers and business leaders of Apusco must demonstrate an ethical approach by example. This will show that middle and junior managers will be rewarded for taking an ethical stance and create the appropriate organisational culture.
- Apusco places high regard towards ethical and sustainable business practices which appear to be clearly communicated to staff and suppliers and by communicating its positive actions this should assist in achieving its overall business objectives.