Sustainable HRM and Ethical Leadership

1. Ethics
What is ethics?
→ it is about what is right and wrong
● Descriptive ethics: description about norms and values a certain group of people
adheres to
● Normative ethics: reflection about what norms and values to follow
● Applied ethics: application of specific norms and values to a specific situation

What is the difference between ethics and morality?

● Morality: practice: good behaviour
● Ethics: theory about what is right and wrong (normative ethics)

1. 1. Business Ethics
What is business ethics?
→ ethics related to business, meaning, the question of what is right and wrong concerning:
● Business situations
● Business activities
● Business decisions

Why is it important for firms to consider ethics?

→ Because it is:
● The right thing to do
● Often prescribed by laws and regulations
● Demanded by societies
● Watched by the media/NGOs
● Demanded by governments
● Demanded by customers
● Demanded by international rules/human right
● Contributing to a good image/reputation
→ It Contributes to:
- Higher sales
- Better relationships to business partners
- Better relationships with governments
- Higher motivation of employees

What could happen if ethics are ignored by firms?

→ Punishment in various forms:
● Legal: fines, restrictions to firm’s activities
● Bad reputation
● Less demand
 ● Boycotts
● Legitimacy of firm’s activities might be questioned

1. 2. Corporate Social Responsibility

Definition:
● CSR = Responsibility of corporations for their impact on society
→3 dimensions:
- Social
- Ecological
- Economic

Corporate Social Responsibility is about:

● Relationship between corporations and societies
● Responsibilities of corporations

Stakeholders interested in CSR:

● Consumers
● Employees
● Suppliers
● Creditors
● Local communities
● Environment

What concerns do stakeholders have?

● Consumers: good quality of products and services, Affordable price, …
● Employees: Good working conditions,…
● Suppliers: Reliable partnership, Timely payments, Good reputation,…
● Creditors: Reliability, Timely payment
● Local communities: No damage, Benefits, Jobs
● Environment – who represents its interests?: Environmental groups, local
communities, governments,…

Companies need to consider CSR, because:

● Necessary for society in the country of origin to view activities as legitimate
● Moral expectations in the society of operations
→If firms anticipate society’s concerns:
● Less costly than reacting only after scandal has been discovered
● Company’s activities regarded as legitimate
● Good reputation
→Demand will increase
● Competitive advantage for future success
● Consumers want businesses to consider CSR
● Suppliers want partners to consider CSR
 ● Consumers/politicians want firms to consider social and ecological consequences of
activities
● Media/NGOs will report if there is bad CSR performance
→Important for reputation

Since stakeholders want companies to consider CSR – how to implement CSR?

→By developing a stakeholder perspective
● Company gets insights from stakeholders
● Company can more easily respond to expectations
● Can more easily develop an implementation strategy

When and how to implement a CSR strategy?

1. As a reaction to external demands/criticism (defensive)?
→What are the advantages/disadvantages?
- Advantage: responding to a need, because otherwise: problems, higher costs, bad
reputation
- Disadvantage: already negative reputation
2. Active decision to do so (offensive)?
→advantages, disadvantages?
- Advantage: competitive advantage, good reputation
- Disadvantage: might be costly

What is your suggestion?

→Advantages of an offensive strategy:
● Realising advantages: competitive advantage, good reputation
● avoiding disadvantages
● New business ideas/innovations => first mover advantages => Maximising benefits
and reducing costs

Firms are sometimes accused of Greenwashing-What is it?

→ giving the impression that a product is more environmentally friendly than it really is
What are the effects of Greenwashing?
→ Possible short-term gains
→ If consumers/media get aware of Greenwashing
● Bad reputation
● Lower sales
● Difficult to restore a good reputation
Questions about Carroll‘s CSR Pyramid:
1. Is it correct to have this hierarchy?
Carroll's CSR Pyramid is a widely recognized and influential framework that has been used
for many years to understand and discuss corporate social responsibility.Ultimately, the
appropriateness of the hierarchy depends on various factors, including cultural norms,
stakeholder expectations, industry practices, and evolving societal values. It's essential for
businesses to adapt and respond to the specific needs and expectations of their stakeholders,
while also considering the broader social and environmental challenges of the world.
2. What is the consequence if firstly firms only need to consider whether they are
profitable?
If firms prioritise profitability above all else and neglect their other responsibilities, it can
lead to various consequences like reputational damage, legal and regulatory issues, ethical
concerns, stakeholder disengagement, and long-term sustainability challenges for firms. It is
crucial for businesses to embrace a broader view of corporate social responsibility to thrive in
today's business landscape.
3. Do you think ethical considerations can only start if the company is economically
profitable and fulfils the requirements set by laws?
Ethical considerations should not be contingent on a company's profitability or legal
compliance. Ethical behaviour should be ingrained in a company's values and practised
regardless of financial success or legal obligations.
4. What about the nature of products or services produced/offered?
The nature of products or services produced/offered by a company plays a significant role in
ethical considerations. Companies have a responsibility to assess the social and
environmental impacts of their offerings. This includes ensuring product safety, avoiding
harm to consumers or the environment, promoting sustainability, and addressing issues such
as product quality, transparency, and fair pricing. It is essential for businesses to consciously
consider the ethical implications of their products or services and make decisions that
minimise negative impacts and maximise positive contributions to society.
5. Is it equally good to produce weapons or food

1. 4. Sustainability
Video: sustainability:
● Questions:
● How is sustainability explained? Using the three pillar model, the model is based on
environmental, economical and social considerations
● Do you agree – do you see it differently?
● Which aspects would you add

Sustainability Meaning today: the way we live needs to be in accordance with

● the ability of future generations, and
● the people in different parts of the world
● to live a decent life
● the needs of the planet, „mother earth“
Three Dimensions of Sustainability: Balance to be achieved

Meaning for Business:

● Triple Bottom Line: Business has three goals:
1. Adding economic value
2. Adding environmental value
3. Adding social value

1. 5. Cases
What influence do company policies have on the behaviour of their employees from an
ethical perspective?
Company policies have a significant influence on employee behaviour from an ethical
perspective. They provide clear expectations and guidelines for ethical conduct, ensuring
compliance with laws and regulations. Policies also offer frameworks for ethical
decision-making, accountability measures, and consequences for misconduct. Reporting
mechanisms and regular training reinforce ethical behaviour and promote a culture of
integrity within the organisation. Overall, company policies play a crucial role in shaping
employee behaviour and fostering an ethical corporate culture.

2. Philosophical Ethics and Sustainable Development Goals

2. 1. Philosophical Ethics
ARISTOTLE
- Everyone is important in his position/with his capabilities
- Ethics for free citizens
→Aim of ethics: to lead a happy life or to strive for a happy life (ethics of striving)
● Motor of acting: to strive for the good
● Highest good: Happiness (there are many goods but the highest will only be pursued
because of itself)
● Example: Student studies in order to get good results in the exam in order to get a
good BA/MA degree in order to get a good job,… in order to get happiness
● All actions of human beings are directed towards happiness in the sense of using
one‘s abilities and realising one‘s full potential
→ Ethics centres around finding out what this happiness (Eudaimonia) is:
● Striving for happiness (which includes happiness of others) can be done by using ones
virtues
● Humans have two kinds of virtues:
 1. intellectual virtues (dianoetic virtues): Knowledge, wisdom, understanding, art
(technical capabilities), reason
2. moral virtues (desire regulating: e.g. justice, generosity, courage) virtue is the
mean between 2 extremes: e.g. between greed and wastefulness the mean is
generosity
● In order to find out what the mean is one needs the virtue of reason: one tries to find
out what is useful and good by looking at the whole life and then one decides on the
path to go in order to reach one‘s ultimate goal

Justice:
1. Justice in a general sense: I use my virtues in a way which is beneficial for others
2. Justice in exchanging and distributing goods:
- Distributive justice (iustitia distributiva): everyone receives according to his
contribution/competence
3. Balancing/corrective justice:
- just/fair exchange (iustitia comutativa) of goods or
- restoring justice (iustitia correctiva) e.g. after a theft

UTILITARIANISM
● Criterion for morality: happiness in a hedonistic sense (highest utility)
● Consequences of actions (or of rules on how to act) are decisive
● Every human being counts the same
● Social and political reforms can be quantified

→ Two forms of utilitarianism:

1. Action-based utilitarianism:
● Decision taken for each individual action
● Action is morally correct whose consequences lead to a welfare maximum for all
effected Rules-based utilitarianism:
- Decide which rule is relevant for action
- Act according to the rule which is in accordance with the maximum welfare
for all
2. Consequentialist (utilitarian) approaches:
● focusing on the consequences of actions
● act in the way in which the welfare/utility of the majority of those affected will be
maximised
→Necessary to know:
● Consequences of actions
● All people affected by actions
● Effects on the well-being/utility of those affected
● Calculation: Summing up individual gratifications → Collective gratification = all
benefits
● Result of hedonistic calculation: based on reason and the action which maximises the
collective benefits shall be implemented.
→Problems:
● Exactly determining the consequences of the action
● Exactly determining who is affected by an action
● Knowledge what individual people understand by well-being
● What about the rights of minorities and what about Human Rights which shall be
enjoyed by everyone

KANT
Acting in accordance with duties:
- Human beings:
● are free to reflect on how they want to act
● use their reason to decide what to do
● are able to act independently of instincts or desires (autonomously)
● find out on their own what their duties are by using reason
● If someone acts only because he/she feels obliged, that is legality
● Unconditionally good means that someone wants to pursue the duty as such, meaning
he will be very committed
● Morality can only be identified by the good will
● Legality: necessary precondition of morality
● Moral Acting:
- Someone does what his duty is and
- He/she does it because he/she wants to do what his/her duty is

Highest criterion on how to act is Categorical Imperative: (in different forms)

● Categorical = always valid
● Imperative = Appeal to act
● Maxim = principle on which a person acts

1. “ Act only on that maxim through which you can at the same time will that it should
become a universal law” → Meaning: act only in the way you can want everyone else to act
as well

Categorical Imperative: (in different forms)……

2. End in itself formula: “Act in such a way that you always treat humanity, whether in your
own person or in the person of any other, never simply as a means, but always at the same
time as an end” → Meaning: while acting always respect yourself and everyone else (always
consider human dignity)

Kant differentiates 4 categories of duties:

1. perfect duties toward ourselves,
2. perfect duties toward others,
3. imperfect duties toward ourselves and
4. imperfect duties toward others.
→ In order to find out what to do: Test:
1. Can you imagine everyone following the same maxim
2. Can you want that everyone follows the same maxim

EXAM
1. Are the classical ethical approaches still relevant nowadays?
Yes, classical ethical approaches continue to be relevant and influential in modern ethical
discussions. While ethical theories have evolved and expanded over time, the foundational
principles and ideas put forth by classical approaches still provide valuable frameworks for
understanding and evaluating ethical issues.
2. What can be implemented?
For example Utilitarianism: Utilitarianism, which focuses on maximising overall happiness
or utility, remains applicable in analysing the consequences of actions and their impact on the
well-being of individuals and society. The utilitarian perspective continues to inform ethical
discussions around topics like resource allocation, public policy, and decision-making in
various fields.
3. Which approach is most suitable in which context
For example Utilitarianism: Utilitarianism is often useful in contexts where the consequences
of actions have significant impact and can be measured or compared. It can be applied to
issues such as public policy, resource allocation, and decision-making that involves
maximising overall happiness or well-being.

2. 2. Sustainable Development Goals and Companies

Questions:
1. Who was involved in setting up the SDGs?
The United Nations (UN) played a central role in setting up the Sustainable Development
Goals (SDGs). The process of developing the SDGs involved extensive consultation and
engagement with various stakeholders, including governments, civil society organisations,
businesses, academia, and individuals from around the world.
2. Why did countries agree on the SDGs?
Countries agreed on the SDGs to establish a comprehensive and inclusive global
development agenda, address interconnected challenges, promote international cooperation,
and commit to sustainable development for the benefit of present and future generations.
3. Do you think SDGs are important for the future?
The SDGs are important for the future as they provide a comprehensive framework for
addressing global challenges, promoting inclusivity, fostering global collaboration, and
ensuring long-term sustainability. They offer a roadmap to guide collective efforts towards a
more sustainable, equitable, and prosperous future for people and the planet.
4. Why should companies consider SDGs?
Considering the SDGs benefits companies by unlocking business opportunities, managing
risks, meeting stakeholder expectations, fostering innovation, facilitating collaboration, and
securing the licence to operate. By aligning their strategies and operations with the SDGs,
companies can contribute to sustainable development while driving their own success.
5. What are advantages for companies, if they do consider SDGs?
Considering the SDGs can bring advantages to companies in terms of reputation, access to
new markets, improved risk management, cost savings, talent attraction, and access to capital.
Embracing the SDGs not only contributes to sustainable development but also enhances the
long-term competitiveness and profitability of businesses.
6. What are advantages for societies?
Zocieties benefit from the SDGs through sustainable development, poverty reduction,
improved health and well-being, environmental preservation, economic opportunities,
inclusive societies, and collaborative approaches. The SDGs provide a comprehensive
framework to address societal challenges and create a more sustainable, equitable, and
prosperous future for all.

3. Business Ethics in different value traditions (explain for one religion how would you
adapt your decisions to make everyone feel respected).

In Christianity, the following principles and values can shape business ethics:
1. Love and Respect for Others: In the context of business, this principle requires treating all
stakeholders with respect, dignity, and fairness. It means valuing employees, customers,
suppliers, and the community, and considering their well-being in decision-making processes.
2. Integrity and Honesty: In business, this means practising transparency, being truthful in
communication, and maintaining ethical conduct in all transactions and relationships. It
involves avoiding deceit, fraud, and any form of unethical behaviour.
3. Justice and Fairness: In business, this principle requires ensuring equal opportunities,
fairness in employment practices, and equitable distribution of resources. It means avoiding
discrimination, exploitation, and unjust practices that harm individuals or communities.
In summary, adapting business decisions to respect everyone within a Christian ethical
framework involves incorporating principles of love, respect, integrity, stewardship, justice,
and compassion. By aligning with these values, businesses can create an ethical and inclusive
environment that promotes the well-being and dignity of all individuals involved.
4. Globe Study Of cultural dimensions
1. Humane orientation: → Extent to which a society encourages and rewards: fair, altruistic
and generous attitude of individuals towards each other
2. Gender egalitarianism: → Extent to which societies: reject traditional gender roles and
encourage non-discrimination
3. Assertiveness: → Extent to which individuals are: assertive, aggressive, don‘t shy away
from conflicts in relationships with other
4. Performance orientation: →Extent to which a society rewards:individual performance
improvement and excellence

Why are the cultural dimensions important and do you think the additional dimensions
(compared to Hofstede) are adding useful insights?
The Globe Study of Cultural Dimensions is important as it promotes cross-cultural
understanding, aids in global business and collaboration, facilitates leadership development,
enhances cultural sensitivity and adaptability, assists in conflict resolution, supports cultural
diversity in organisations, and contributes to academic research and theory development.
Embracing the insights from the Globe Study helps individuals, organisations, and societies
navigate the complexities of a globalised world and foster positive intercultural relationships.

GLOBE - Differences compared to Hofstede:

● Consultation with members of the cultures surveyed to eliminate western bias in
research categories
● Differentiation into values (“what should be”) and practices (“what is”)
● 9 cultural dimensions and 10 societal clusters
● Focus on societal cultures (not national cultures)
● Research into culturally different leadership styles and their global application

These additional dimensions complement Hofstede's dimensions by offering nuanced insights

into cultural variations that may not be fully captured by the original set. They provide a
more comprehensive framework for understanding cultural differences and their impact on
various aspects of society, business, and interpersonal relationships. Therefore, integrating the
additional dimensions from the Globe Study enriches our understanding of cross-cultural
dynamics and allows for more accurate cross-cultural comparisons and analysis.

4. 1. Case: Cluster questions

1.What do you think about the clusters?
Culture clusters can be a useful starting point for understanding broad cultural patterns and
tendencies within specific regions. They offer comparative insights and cultural context,
particularly in business and cross-cultural interactions. However, it's essential to recognize
the limitations and remember that individual and contextual differences within countries and
regions also play a significant role in shaping cultural dynamics.
2. Do the country groupings make sense to you and what would you criticise?
Country groupings are based on various factors such as geographical proximity, historical
ties, linguistic similarities, and cultural patterns. These groupings attempt to identify
commonalities and differences among countries within a particular region so they do make
sense. However, it's important to approach country groupings with caution and recognize that
they are generalisations. Culture is complex and multifaceted, and there can be significant
variations within countries and even within regions. People's beliefs, values, and behaviours
can differ based on factors such as age, education, socio-economic background, and
individual experiences.

3. Explain a cluster (The main features of the cluster, Important aspects of the culture you
would add, your view on the composition of the cluster, whether the countries fit together and
countries you would leave out and countries you would add).

→The Latin Europe cluster includes countries with cultural and historical ties to the Latin
language and Roman influence: France Israel Italy Portugal Spain Switzerland (French- and
Italian speaking samples).

→The main features of the Latin Europe cluster:

● The countries within this cluster predominantly speak Romance languages derived
from Latin, such as Spanish, Portuguese, Italian, and French.
● Catholic Influence: Catholicism has historically been a dominant religion in the Latin
Europe cluster, influencing cultural practices, values, and traditions.
● Mediterranean Lifestyle: emphasising leisure, family values, and a relaxed approach
to time. The region is known for its emphasis on socialising, enjoying good food, and
valuing interpersonal relationships.
● Passionate Communication Style: People in the Latin Europe cluster tend to exhibit
passionate and expressive communication styles, using gestures, intonation, and body
language to convey their emotions. Conversation and lively debates are often valued
and can be seen as a form of engagement and intellectual exchange.

→Regarding the composition of the cluster and potential additions or exclusions, there can be
arguments for the inclusion of Greece, given its historical connection to the Roman Empire
and its influence on European civilization. Additionally, Andorra, Monaco, or San Marino,
as they are small countries with close cultural and historical ties to neighbouring Latin
European countries. Also Israel’s inclusion in this cluster may be related to the fact that there
was a strong Jewish community in Spain before they moved to Eastern European countries
but don't share as many other common aspects with the rest of the countries.

5. Hall: 4 cultural dimensions

Developed cultural dimensions, based on: intercultural communication between individuals
and qualitative studies.
Interested in the relationship between culture and management styles: culture seen as
dynamic.
What are management tasks? (aprenderme un poco de cada uno y luego me centro en time
planning de alemania vs esapña)
1. Planning →goals and objectives of a company or department
2. Organising → organising actions needed to achieve the goals
3. Staffing → allocating employees to particular positions
4. Directing → leading the organisation and its employees towards its goals
5. Controlling → monitoring performance of the company or department

5. 1. Context: high vs low

5. 2. Space: private vs public

5. 3. Time: monochronic vs polychronic

5.4. Information flow: slow vs fast flow

What does it mean for communication and management tasks?
E.g. comparing the USA to Europe: „In the United States it is not too difficult to get to know
people quickly in a relatively superficial way, which is all that most Americans want. […]
They seem capable of forming only one kind of friendship - the informal, superficial kind that
does not involve an exchange of deep confidences. Conversely, in Europe personal
relationships and friendships are highly valued and tend to take a long time to solidify. This is
largely a function of the long-lasting, well-established networks of friends and relationships –
particularly among the French-that one finds in Europe. Although there are exceptions, as a
rule it will take Americans longer that they expect to really get to know Europeans. It is
difficult, […] for a foreigner to break into these networks. Nevertheless, many
businesspeople have found it expedient to take the time and make the effort to develop
genuine friends among their business associates.“

6. Culture Influencing Leadership

Characteristics of successful leaders:
● Intelligence
● Knowledge
● Initiative
● Ambition
● Persistence
● Honesty
● Self-awareness
● Curiosity
● Strategic thinking
● Overseas experience
● Sensitivity to cultural diversity…….

6.1. Leadership theories

6. 3. Different Leadership Styles (estudiar 2)

6. 4. Country examples
-Explain 4 countries and which leadership style fits better

Spain and Portugal: 1+2

Germany and netherlands: 1+3
7. Preserving the Planet - Challenges to solve
Develop a strategy to help save the planet
Idea: Encouraging Sustainable Transportation through Carpooling Communities

The Strategy for its implementation would be to first develop a comprehensive awareness
campaign highlighting the environmental benefits of carpooling, such as reducing carbon
emissions and traffic congestion and collaborate with environmental organisations,
government agencies, and media outlets to spread the message through various channels,
including social media, public service announcements, and educational campaigns.

Possible Actors Supporting Implementation:

1. Environmental Organisations: Provide expertise and resources for raising awareness and
promoting sustainable transportation practices.
2. Government Agencies: Support the development of policies, regulations, and infrastructure
to encourage carpooling.
3. Transportation Providers: Integrate carpooling options into their existing platforms and
offer incentives for carpool participants.

By involving these actors and implementing a comprehensive strategy, the idea of promoting
carpooling communities can gain traction and contribute to saving the planet by reducing
carbon emissions, easing traffic congestion, and fostering a more sustainable transportation
system.

7.1. Sustainability and Ethical Leadership: Company Fairphone

1. Do you think Fairphone is a good project or do you think it is green-/social washing?
2. Do you think question 1 is answered differently in different cultures and religions? If so,
how?
3. Do you think it is ok to call it a fairphone although not all the materials are being extracted
in an environmentally friendly way and in a way which ensures human rights are being
respected?
4. What are your ideas to improve the next version of fairphone?
5. Do you think fairphone have an impact on the whole mobile phone industry? If so, which?
Dimensions of Sustainability
What is Fairphone
What are the problems addressed?
How do they implement CSR?
What is still not solved?

Business contributing to welfare/well-being of all

7.2 Human rights in business

Who has obligations in guaranteeing Human Rights and what obligations do they have?
1. States
They have to:
• Respect Human Rights
→ not restricting anybody in his own possibilities of enjoying human rights
• Protect Human Rights
→ ensure that others respect human rights
• Fulfil Human Rights
→ help in case of need/emergency

2. International community
• Help in case the nation state is not able to fulfil human rights on his own
• Ensure international arrangements are facilitating the progressive implementation of human
rights

3. Companies and all other entities

• Respect human rights

4. Individuals
• Respect human rights of others
• Do everything to ensure own human rights

7.3. Business and human rights

Human Rights obligations:
1. Protect: states have the duty to protect against human rights abuses of third parties,
including business enterprises, through:
● Appropriate policies
● Regulation
● Adjudication
2. Respect: corporate responsibility to respect human rights, meaning: business enterprises
should act with due diligence in order to:
• Avoid infringing on the rights of others
• Address adverse impacts with which they are involved (in the whole value chain)
3. Remedy: victims should have greater access to effective remedy if human rights violations
occur

Human Rights obligations: …

2. The corporate responsibility to respect Human Rights:
Meaning: all Human Rights have to be respected:
• All internationally recognized human rights laws
• All labour rights (International Labour Organization)
Additionally: Prevent or mitigate negative human rights impacts that are linked to operations
(business partners, value chain,..)
Meaning: Businesses should:
● Commit themselves to respect human rights
 ● Implement a due diligence process (carefully check whether human rights are
respected) 3. Implement a process to end any negative impacts on human rights
(including: defining responsibilities, budget allocation, …)
● Regularly check whether the process is effective (through feedback from affected
stakeholders,...)
● Provide adequate information about it
● If negative impacts on human rights occurred → remediation

3. Access to remedy: Businesses should:

• Develop and implement together with external stakeholders complaint procedures which
are: Accessible for those affected, Predictable, Equitable and Transparent.

How to prevent human rights violations in the company and the whole value chain?
• Follow human rights obligations and implement suggested procedures
• Implement ethical guidelines
• Regularly check ethical performance
• Allow independent organisations to monitor ethical/human rights performance
• Consult with external stakeholders