Responsible European Management

Prof. Maddy JanssensProf. Maddy Janssens

Katholieke Universiteit Leuven, BelgiumKatholieke Universiteit Leuven, Belgium

Why good companies do bad things? The senior managers consider ethical or social issues as The senior managers consider ethical or social issues as

matters for somebody else to resolvematters for somebody else to resolve They talk to the same circle of people and information They talk to the same circle of people and information

sources all the time and avoid people or organisations who sources all the time and avoid people or organisations who disagree with them or criticise themdisagree with them or criticise them

They discourage employees from thinking about their work They discourage employees from thinking about their work as whole people, from using their moral and social as whole people, from using their moral and social intelligence as well as their business intelligenceintelligence as well as their business intelligence

They focus exclusively on financial measures of They focus exclusively on financial measures of performanceperformance

(Schwartz & Gibb, 1999)(Schwartz & Gibb, 1999)

Structure

Responsible ManagementResponsible Management Value Based ManagementValue Based Management Stakeholder EngagementStakeholder Engagement A Place for Personal DevelopmentA Place for Personal Development Towards ImplementationTowards Implementation

Responsible Management ResponsibilityResponsibility

as members of society, organizations have an obligation as members of society, organizations have an obligation to uphold social valuesto uphold social values

however, digression into debates among competing however, digression into debates among competing moral positionsmoral positions

Responsiveness Responsiveness technical capability and willingness of organizations to technical capability and willingness of organizations to

adjust to society as reflected in the behavior of the adjust to society as reflected in the behavior of the organizationorganization

focus on specific issues focus on specific issues

Value Based Management

Values - Identity - BehaviorValues - Identity - Behavior Types of ValuesTypes of Values Management of ValuesManagement of Values

Value Based Management

Values are central to the identity of an Values are central to the identity of an organizationorganization

Stakeholder Values

Organizational Values

Individual Values

Social Values

Value Based Management

ValuesValues exist in a hierarchical relationship to anotherexist in a hierarchical relationship to another

business valuesbusiness values social valuessocial values

drivers of behaviordrivers of behavior behaviors are indicators of underlying valuesbehaviors are indicators of underlying values critical events to identify values-in-use and critical events to identify values-in-use and

espoused valuesespoused values

Value Based Management

Business ValuesBusiness Values profit motive: success orientation - positive profit motive: success orientation - positive

cost/benefit ratio - competition orientationcost/benefit ratio - competition orientation future and product orientation: stability - future and product orientation: stability -

predictability - control - order predictability - control - order Value based management is for many Value based management is for many

people: value for shareholderspeople: value for shareholders

Value Based Management

Social ValuesSocial Values f.ex. values that strengthen collaboration with f.ex. values that strengthen collaboration with

stakeholdersstakeholderssystems thinking - service - authenticity and trust - systems thinking - service - authenticity and trust -

wisdom of the individual - spirit of inquiry/risk takingwisdom of the individual - spirit of inquiry/risk taking

f.ex. chemical companyf.ex. chemical companyparticipation - personal growth - autonomy - variety - participation - personal growth - autonomy - variety -

career development - minimalization of status career development - minimalization of status differencesdifferences

Value Based Management

Social ValuesSocial Values social mission statementsocial mission statement

“…“…is a democratic, ethical and innovative provider of is a democratic, ethical and innovative provider of financial services to its members. Through strong financial services to its members. Through strong financial performance, we serve as catalyst for the financial performance, we serve as catalyst for the self-reliance and economic well-being of our self-reliance and economic well-being of our membership and the community”membership and the community”

Value Based Management

‘‘Management of Values’ Management of Values’ explicit process of identifying the type of explicit process of identifying the type of

values that drive decision making values that drive decision making skeleton principles: guide for actions applied in skeleton principles: guide for actions applied in

a specific situationa specific situation

--> balance between business and social goals--> balance between business and social goals attention to attention to processprocess of defining the values: how of defining the values: how

and who?and who?

Value Based Management

Telling

Selling

Testing

Consulting

Co-creating

building a shared value setbuilding a shared value set

Degree of Active Involvement

Value Based Management

Concluding ReflectionsConcluding Reflections link between business goals with broader social link between business goals with broader social

goals and responsibilitiesgoals and responsibilities behaviors and practices grounded in a specific behaviors and practices grounded in a specific

set of values are more credibleset of values are more credible critical events are the test of value based critical events are the test of value based

managementmanagement stakeholder dialogue: whose values have been stakeholder dialogue: whose values have been

considered? considered?

Stakeholder Engagement

Evolution of Stakeholder TheoryEvolution of Stakeholder Theory Input-output modelInput-output model Stakeholder modelStakeholder model Systems modelSystems model

Notion of DialogueNotion of Dialogue Concluding ReflectionsConcluding Reflections

Stakeholder Engagement Management as ‘Input-Output’ ModelManagement as ‘Input-Output’ Model

inputsinputs management controlmanagement control outputoutputlaborlabor servicesservices

capitalcapital productsproducts

equipmentequipment internal operationsinternal operationssupplies...supplies...

aa: cost containment: cost containment

b: creation of needsb: creation of needs

c: goal selection and direction of work processc: goal selection and direction of work process

a b

c

Stakeholder Engagement

Input-Output ModelInput-Output Model relationship to society: independentrelationship to society: independent responsibility of corporation: to make a profitresponsibility of corporation: to make a profit role of managers: agents of shareholdersrole of managers: agents of shareholders management style: defensivemanagement style: defensive

Stakeholder Engagement

Stakeholder ModelStakeholder Model each company has its own unique set of each company has its own unique set of

stakeholder groups who are affected by stakeholder groups who are affected by corporate activities and can affect the corporate activities and can affect the corporationcorporation

primary and secondary stakeholdersprimary and secondary stakeholders primarily: directly linked interests primarily: directly linked interests secondarily: indirectly influence secondarily: indirectly influence

Stakeholder Engagement

Organization

CustomersCompetitors

ShareholdersEmployees

Unions

Suppliers

Community

NGO’s

Stakeholder Engagement

Stakeholder ModelStakeholder Model relationship to society: interpenetratingrelationship to society: interpenetrating responsibility of corporation: to respond to responsibility of corporation: to respond to

stakeholdersstakeholders role of managers: relationship managersrole of managers: relationship managers management style: bufferingmanagement style: buffering

Stakeholder Engagement

Role of Managers? (Freeman, 1984)Role of Managers? (Freeman, 1984) expected to serve as the internal representatives expected to serve as the internal representatives

of the various stakeholder groupsof the various stakeholder groups interaction on issues of mutual concernsinteraction on issues of mutual concerns interaction should be voluntary, based on interaction should be voluntary, based on

cooperation, communication and negotiationcooperation, communication and negotiation difficult task of weighing and prioritising the difficult task of weighing and prioritising the

conflicting demands and interests of various conflicting demands and interests of various stakeholders stakeholders

Stakeholder Engagement

CritiCritiquesques balancing conflicting interests is simply not balancing conflicting interests is simply not

possiblepossible only attention to powerful stakeholders whose only attention to powerful stakeholders whose

claim is then considered to be legitimate and claim is then considered to be legitimate and urgenturgent

stakeholder management techniques seek to stakeholder management techniques seek to direct and control interactions with direct and control interactions with stakeholders: compliance instead of truststakeholders: compliance instead of trust

Stakeholder Engagement

Towards Relational Conception of Towards Relational Conception of Stakeholder TheoryStakeholder Theory emphasis on relationships themselves instead of emphasis on relationships themselves instead of

interests of stakeholdersinterests of stakeholders managers are not separate from stakeholder managers are not separate from stakeholder

relationships but part of it relationships but part of it the stakeholder relationships are multiple and the stakeholder relationships are multiple and

constitute social networksconstitute social networks

Stakeholder Engagement

Organization

CustomersCompetitors

ShareholdersEmployees

Unions

Suppliers

Community

NGO’s

Stakeholder Engagement

Systems ModelSystems Model relationship to society: interdependentrelationship to society: interdependent responsibility of corporation: to find ethical responsibility of corporation: to find ethical

win-win opportunities with stakeholderswin-win opportunities with stakeholders role of managers: relationship buildersrole of managers: relationship builders management style: collaborativemanagement style: collaborative

Stakeholder Engagement Role of Managers?Role of Managers?

don’t manage stakeholders’ relationships but don’t manage stakeholders’ relationships but manage the expectations of the relationship manage the expectations of the relationship

involve those stakeholders who are affected by a involve those stakeholders who are affected by a decision, in making that decisiondecision, in making that decision

care for the needs of stakeholders - respect care for the needs of stakeholders - respect different perspectivesdifferent perspectives

-->evaluate decisions by the way they are made and -->evaluate decisions by the way they are made and by whom, not by their content or consequences by whom, not by their content or consequences

Stakeholder Engagement Notion of DialogueNotion of Dialogue

dialogue dialogue ≠≠ consensus consensus dialogue: dialogue:

explore underlying patterns of meaningexplore underlying patterns of meaning allow addressivity, responsiveness of the other allow addressivity, responsiveness of the other

partiesparties allow the differences to co-exist allow the differences to co-exist

dialogue dialogue ≠≠ argumentation argumentation other ways of communication: story tellingother ways of communication: story telling

Stakeholder Engagement

Concluding ReflectionsConcluding Reflections focus not only on stakeholders’ interests but focus not only on stakeholders’ interests but

also on relationships themselvesalso on relationships themselves concern with process questions: concern with process questions:

who needs to be involved?: be concerned for the who needs to be involved?: be concerned for the ‘silent’ stakeholders‘silent’ stakeholders

what is the process of deciding?: create an inclusive what is the process of deciding?: create an inclusive way of communication way of communication

A Place for Personal Development DevelopmentDevelopment

conditions of developmentconditions of development organizational barriers of developmentorganizational barriers of development

Diversity in DevelopmentDiversity in Development different needs within work contextdifferent needs within work context different needs outside work contextdifferent needs outside work context

A Place for Personal Development Development as Growth of ‘Whole Person’Development as Growth of ‘Whole Person’

as employees, members of an organizationas employees, members of an organization as ambassadors of the organization to its as ambassadors of the organization to its

customers, clients, audiences and supplierscustomers, clients, audiences and suppliers as citizens of the wider society in which the as citizens of the wider society in which the

organization existsorganization exists as human beings with the need to realize their as human beings with the need to realize their

own capabilitiesown capabilities

A Place for Personal Development Development? Development?

integration of work and learningintegration of work and learning job development programsjob development programs personal learning plan: personal skillspersonal learning plan: personal skills

liaisons with local organizationsliaisons with local organizations bring outsiders into the organizationbring outsiders into the organization stimulate outside links with communitystimulate outside links with community

A Place for Personal Development Conditions of DevelopmentConditions of Development

explorationexploration of new possibilities > of new possibilities > exploitationexploitation of old certaintiesof old certainties

unlearning, experimenting with alternative unlearning, experimenting with alternative environments, intentionally creating instability, environments, intentionally creating instability, varietyvariety

differencedifference as driver of development as driver of development

A Place for Personal Development Organizational BarriersOrganizational Barriers

organizations tend to assign their resources to organizations tend to assign their resources to exploitationexploitation

organizational practices tend to stress organizational practices tend to stress samenesssameness division of labordivision of labor formalisationformalisation socialisationsocialisation

A Place for Personal Development Diversity of Needs within Work ContextDiversity of Needs within Work Context

interests of modal employee interests of modal employee ≠≠ diverse employees diverse employees role of unionrole of union

content of the union agenda: discourse of equality and fairness content of the union agenda: discourse of equality and fairness precludes the acknowledgement of the diversity of interestsprecludes the acknowledgement of the diversity of interests

process of the unions: development of arena’s, spaces in which process of the unions: development of arena’s, spaces in which diverse employees can identify and articulate their concernsdiverse employees can identify and articulate their concerns

--> focus on issues at the level of the workplace--> focus on issues at the level of the workplace

A Place for Personal Development Diversity of Needs outside Work ContextDiversity of Needs outside Work Context

development may mean:development may mean:work-life balance, child care, part-time work, leave of work-life balance, child care, part-time work, leave of

absence, ...absence, ...

--> --> stepping ‘aside’ from the normstepping ‘aside’ from the norm

A Place for Personal Development Concluding ReflectionsConcluding Reflections

Step aside from the normStep aside from the norm development has different meaningsdevelopment has different meanings

Create spaces to identify and articulate different Create spaces to identify and articulate different interestsinterests

Create spaces where a variety of options can be Create spaces where a variety of options can be further developedfurther developed

Towards Implementation Instead of a cry for tools, we should be Instead of a cry for tools, we should be

crying out for skillscrying out for skills skills in bringing people together, in promoting skills in bringing people together, in promoting

and facilitating dialogueand facilitating dialogue skills in creating a safe space within which skills in creating a safe space within which

issues can be ventilated with minimum of painissues can be ventilated with minimum of pain skills in guiding institutional learning and skills in guiding institutional learning and

collective strategizingcollective strategizing