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230 The Thirty…Day MBA 
contribution to the environment at a much lower cost to its shareholders; 
but probably on another continent and in another technology。 
Resolving stakeholder conflicts calls for tact and munications 
and the recognition that while you can’t please everyone; you can still 
be ethical。 About 1 per cent of Shell’s investments are in green projects。 
For example; a pany subsidiary; Shell Solar; has played a major role 
in the development of first…generation CIS (copper indium diselenide) 
thin…film technology。 This it believes to be the most mercially viable 
form of photovoltaic solar technology to generate electricity from the 
sun’s energy。 Together with its joint venture partner in this project; Saint 
Gobain; it has a pilot plant under construction in Saxony; Germany that 
will produce sufficient solar panels to save 14;000 tonnes of CO2 per year。 
So stakeholders such as the UK government and Denmark’s DONG Energy 
in the London Array project had to be weighed up against Saint Gobain; 
with the German government being party to both strategies through the 
participation of that country’s energy giant; E。ON。 All the while; Shell was 
under pressure to match its historic profit growth。 Authenticity Consulting 
(authenticityconsulting/misc/long。pdf) has a useful checklist to 
help with decisions about resolving stakeholder conflict。 
Whistle…blowers – an ethical longstop 
Not surprisingly; the people most likely to know about unethical or socially 
irresponsible behaviour are those working in the organization itself。 Governments 
around the world have adopted measures to encourage a flow of 
information on ethical problems and fraud from whistle…blowers – that is; 
anyone employed or recently employed by a public body; business organization 
or charity who reveals evidence of wrongdoing。 Whistle…blowers 
have also been given a measure of legal protection。 In the United States 
the Lloyd–La Folle。。e Act of 1912 started the ball rolling; giving federal 
employees the right to provide Congress with information; to be followed 
by a patchwork of laws covering such fields as water pollution; the environment; 
the Sarbanes–Oxley Act (2002) to deal with corporate fraud and the 
Whistleblower Protection Enhancement Act (2007)。 In the UK the Public 
Interest Disclosure Act (1998) and various laws enacted by the European 
Union and other governments provide a framework of legal protection for 
individuals who disclose information。 
Many firms too have established ways to a。。ract information on frauds 
being mi。。ed against them; including 24…hour hotlines and corporate 
ethics offices。 For example; Vodafone’s (vodafone/start/ 
responsibility/supply_chain/whistle…blowing。html) ‘Speak Up’ programme 
– launched in 2006/07 – provides suppliers and employees working in its 
supply chain with a means of reporting any ethical concerns。 Fewer than 10 
Ethics and Social Responsibility 231 
incidents were reported in 2006/07。 That low figure may be less to do with 
the absence of ethical problems and more to do with the deeply ingrained 
biases against whistle…blowing and a distrust of assurances that retribution 
will not follow; especially in areas far removed from the watchful eyes of a 
corporate ethics office。 
These organizations can provide further background on the subject: 
。 The National Whistleblowers Centre (whistleblowers): 
Focuses on exposing government and corporate misconduct; promoting 
ethical standards and protecting the jobs and careers of whistle…blowers。 
。 Spinwatch (spinwatch): Monitors the role of public relations 
and spin in contemporary society and has worked with whistle…blowers; 
anonymously; on some of the most contentious issues: Northern Ireland; 
the role of the media; genetic engineering; the oil industry; tobacco 
smuggling; food and farming; and the war in Iraq; for example。 
。 Whistleblower (whistleblower。uk): Run by journalists and set 
up to allow people to sell stories to the media confidentially。 It has had 
a measure of success; breaking the story on how the Richard and Judy 
Show’s ‘You Say; We Pay’ petition was ripping off viewers。 
。 Wikileaks (wikileaks): Its primary interest is in exposing 
oppressive regimes but it offers an avenue for anyone who wishes to 
reveal unethical behaviour in their governments and corporations; with 
a degree of anonymity。 
DOES BEING ETHICAL PAY OFF? 
There is plenty of anecdotal evidence that ethical and socially responsible 
organizations are be。。er places to work。 At the very least; being ethical 
provides an organization with an insurance policy limiting its exposure 
to a range of legal liabilities for faulty products; misleading advertising; 
price fixing and discrimination at work; for example。 But evidence on 
whether being ethical helps a business organization to bee and stay 
more profitable is less clear。 Corpedia (h。。p://welerpedia); 
a pliance and ethics training pany with clients in 60 countries; 
including RadioShack; EMC; Xerox and PepsiCo; produces an index 
of panies deemed ethical。 panies such as Intel; Starbucks; The 
Timberland pany and Whole Foods Market are in its index; which 
it claims has outperformed the S&P 500 by more than 370 per cent over 
5 years。 The rather more scientific and prehensive FTSE4Good Index 
Series (ftse/Indices/FTSE4Good_Index_Series/Performance_ 
Analysis。jsp) also shows the ethical panies to be ahead; though by a 
rather smaller margin。 Over the 5 years to May 2008; the 400 panies in 
the FTSE4Good Index were about 15 per cent ahead of the general index。
232 The Thirty…Day MBA 
But that still begs the question of what constitutes ‘good’。 The FTSE4Good 
Index sets out to measure the performance of panies that meet globally 
recognized corporate responsibility standards。 For inclusion a pany 
must be: 
。 working towards environmental sustainability; 
。 developing positive relationships with stakeholders; 
。 upholding and supporting universal human rights; 
。 ensuring good supply chain labour standards; 
。 countering bribery。 
It also excludes panies that have been identified as having business 
interests in these industries: 
。 tobacco producers; 
。 panies manufacturing either whole; strategic parts; or platforms 
for nuclear weapon systems; 
。 panies manufacturing whole weapons systems; 
。 owners or operators of nuclear power stations; 
。 panies involved in the extraction or processing of uranium。 
This only serves to highlight the problem of deciding what is ethical and 
what is not。 For example; is mining uranium for nuclear power really 
more harmful than; say; switching to biofuels which; aside from probably 
releasing between two and nine times more carbon gases over the next 
30 years than fossil fuels; will almost certainly cause food prices to stay 
high; particularly in the developing world? Or is the motor industry; whose 
products kill more people every year than the armaments industry; a more 
ethical and socially responsible sector? 
However; a small but growing band of business schools believe that 
there is enough mileage in social responsibility and ethics to launch ‘green’ 
MBA programmes that emphasize a triple bo。。om line; also known as ‘TBL’ 
or ‘3BL’ – profit; people; planet。 Antioch University (antiochne。edu/ 
om/mba); New England; Dominican University (greenmba); 
California and Duquesne University; (h。。p://mba。sustainability。duq。edu) in 
Pi。。sburgh are among those offering such programmes。
Operations 
management 
。 Outsourcing 
。 Production methods 
。 Controlling operations 
。 Maintaining quality 
。 Information systems 
To stay ahead; panies need to generate innovation; organize production; 
collaborate with other panies and manage the performance of activities; 
processes; resources and control systems used to deliver goods and 
services。 Operations management is the catch…all title used to hold all these 
disparate fields together。 O。。en in business schools the subject is afforded 
a distinct syllabus of its own; as for example is the case at Cranfield School 
of Management; Warwick and Bocconi; in Milan; Italy。 At Cardiff Business 
School; Logistics and Operations Management are bundled together with 
a strong emphasis on ‘Lean Thinking’ and in Barcelona’s Esade Business 
School ‘Innovation’ is the partner subject。 
However the subject is taught; the foundations if not the content 
started out with the work of Frederick W Taylor。 Usually referred to as 
the ‘father of scientific management’; he studied and measured the way 
people worked; searching out ways to improve productivity。 His book; 
The Principles of Scientific Management (1911; Harper and Row; New York); 
showed how science could replace apprenticeship as the way to transfer 
knowledge about how tasks should be done。 Though much misunderstood 
and misapplied – the Soviet Union adopted his methods as the foundation 
for its five…year plans – Taylorism; as his work became known; was the 
spur to the many variants and extensions that are today bundled under 
operations management。 
10
234 The Thirty…Day MBA 
The next big boost to the discipline took place with the introduction of 
mathematical models used during the Second World War to make maximum 
use of scarce resources。 Fairly mundane tasks; such as removing bo。。lenecks 
in tank production; led to dramatic increases in output。 More esoterically; 
operations research; as this branch of the subject became known; was used 
to work out the optimum size of convoy to evade destruction by German 
U…boats as well as the depth at which explosives would be most effective 
against the submarines themselves。 
MBAs; unless they have a strong background in mathematics; are unlikely 
to be able to apply any of the techniques and tools described below 
without expert help。 But they do need to be aware that such methods are 
on hand and so can remend their application when the opportunity or 
relevant problem arises。 
OUTSOURCING AND THE VALUE CHAIN 
The classic opening question in any business analysis that MBAs will find 
themselves addressing with increasing frequency is: what business are we 
in? Later in that analysis will e a more fundamental and challenging 
question: what business should we be in? These are strategic boundary 
questions that will be explored in more detail in Chapter 12; Strategy。 The 
answers are also key to deciding what operations a business should and 
should not undertake itself; and the answer will not always be the same; as 
business petence and market opportunities change。 
Figure 10。1 Maternity clothes value chain 
Creative design → Purchase of materials → Make up garments → 
Package and distribute → Retail through own outlets → Consumers 
The business example shown in Figure 10。1 doesn’t have to do all the activities; 
from creative design; through manufacture; to selling out from its 
own retail outlets。 It is highly likely that there are other businesses be。。er 
at certain elements of the process。 For example; most businesses don’t 
retail the products they manufacture; and even within the same industry 
different approaches are taken。 Dell onl

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