http://www.businessweek.com/magazine/content/11_15/b4223025579541_page_2.htm
Still in the topic of ethics when companies are going green. In the article ”Why Sustainability Is Winning over CEOs”, Duane Stanford states that executives are trying to come up with innovative ways to realize meaningful cost savings, and at the same time go easier on the environment. He argues that being socially responsible has typically meant handing out checks, but now it has the premise that saving the planet can save big bucks: “Sustainability has emerged as a factor in determining which companies win in the marketplace, and smart CEOs are investing in a more rigorous approach to the environment."
For me, as a costumer, it is nice to read about companies going green. They seem to be more eco-conscious, but the aim of a company is profit maximization, and going green for the sake of going green is a conflict of interest. The question is if these CEOs’ green approach only maintains as long the costs can be reduced. This focus reminds me of ethical egoism, which is an approach where leaders make decisions regarding moral conduct. Ethical Egoism states that a person should act to create the greatest good for herself. In a business context it is the same as making decisions to achieve the goal of maximizing profits.
Ryan mentions in an earlier blog post that Big box retailers as Wal-Mart are violating less green “sins” than green specialty shops. Wal-Mart is an example of a company that is in the front line of the green movement in this article too. Stanford argues that Wal-Mart has realized that they are saving money by working with retailers to reduce packaging, which translates into lower freight and warehouse costs. It seems as if Wal-Mart can achieve its goal of maximizing profits by going green, but are the ethical egoism a sustainable approach to actually improve the environment? What happens when the costs cannot be reduce anymore?
The article also presents PepsiCo’s CEO, Indra K. Nooyi and her strategy “Performance with Purpose”, which links green efforts in all businesses to the bottom line. Nooyi and her strategy have been mentioned before in this blog by Kelly, when she states that "Performance with purpose” means to generate profit and remain socially responsible at the same time. Stanford quotes an official from PepsiCo: "We are able to do the right thing for the organization from a financial return and significantly reduce our greenhouse gases". In this example, you can argue that Stanford’s description of the CEOs’ green focus has a more utilitarian approach. Utilitarianism means that we should behave in order to create the greatest good for the greatest number. Nooyi and other CEOs seem to maximize social benefits, while minimizing social costs, when they focus on realizing cost savings, while they at the same time go easier on the environment.
Based on the examples in the article, do you think that these CEOs have an ethical egoism approach or a more utilitarian approach? That CEOs and companies can save money by being green is a “win-win” situation, but which leadership style do you think would help a CEO to maintain this green focus?
Still in the topic of ethics when companies are going green. In the article ”Why Sustainability Is Winning over CEOs”, Duane Stanford states that executives are trying to come up with innovative ways to realize meaningful cost savings, and at the same time go easier on the environment. He argues that being socially responsible has typically meant handing out checks, but now it has the premise that saving the planet can save big bucks: “Sustainability has emerged as a factor in determining which companies win in the marketplace, and smart CEOs are investing in a more rigorous approach to the environment."
For me, as a costumer, it is nice to read about companies going green. They seem to be more eco-conscious, but the aim of a company is profit maximization, and going green for the sake of going green is a conflict of interest. The question is if these CEOs’ green approach only maintains as long the costs can be reduced. This focus reminds me of ethical egoism, which is an approach where leaders make decisions regarding moral conduct. Ethical Egoism states that a person should act to create the greatest good for herself. In a business context it is the same as making decisions to achieve the goal of maximizing profits.
Ryan mentions in an earlier blog post that Big box retailers as Wal-Mart are violating less green “sins” than green specialty shops. Wal-Mart is an example of a company that is in the front line of the green movement in this article too. Stanford argues that Wal-Mart has realized that they are saving money by working with retailers to reduce packaging, which translates into lower freight and warehouse costs. It seems as if Wal-Mart can achieve its goal of maximizing profits by going green, but are the ethical egoism a sustainable approach to actually improve the environment? What happens when the costs cannot be reduce anymore?
The article also presents PepsiCo’s CEO, Indra K. Nooyi and her strategy “Performance with Purpose”, which links green efforts in all businesses to the bottom line. Nooyi and her strategy have been mentioned before in this blog by Kelly, when she states that "Performance with purpose” means to generate profit and remain socially responsible at the same time. Stanford quotes an official from PepsiCo: "We are able to do the right thing for the organization from a financial return and significantly reduce our greenhouse gases". In this example, you can argue that Stanford’s description of the CEOs’ green focus has a more utilitarian approach. Utilitarianism means that we should behave in order to create the greatest good for the greatest number. Nooyi and other CEOs seem to maximize social benefits, while minimizing social costs, when they focus on realizing cost savings, while they at the same time go easier on the environment.
Based on the examples in the article, do you think that these CEOs have an ethical egoism approach or a more utilitarian approach? That CEOs and companies can save money by being green is a “win-win” situation, but which leadership style do you think would help a CEO to maintain this green focus?
- Eva-Lena Juhlin
I agree with Lena how she likes to hear about companies going green. I think it is very important for a company to “hop” on that bandwagon of cutting costs and protecting our environment at the same time. However, when it comes down to the bottom line I feel that CEO’s are just in it to make their company look good and play a part in good social corporate responsibility.
ReplyDeleteBased on the examples that Lena has outlined and what Ryan has talked about earlier, I definitely think that CEO’s are taking more of the utilitarian approach while using “going green” as a cushion on their organization. I think that by going green a lot of companies translate that to mean “money saver” and “going green” is a nice term to cover it up.
To be quite honest, I feel that as soon as costs cannot be reduced anymore by “going green” the new term with be “cheap packaging.” Companies will be forced to continue their ways of doing business and as times change it will make it difficult to maintain a positive image by just “going green.”
I really think that a Transformational Style leadership would be the best in this situation. A leader with good charisma and the ability to share a vision with their followers seems like a perfect leadership style.
-Kyle Turner
Eva, that was great insight and I agree with you and Kyle a 100% that all companies should hop on the bandwagon and go green to cut organizational costs. I feel that companies should do this because it creates the greatest good for the greatest number. I believe that the Utilitarianism approach should have been applied here. Not only are they cutting their costs but their being more environmental friendly so isn’t that considered the greatest number? I feel that this approach maximizes social benefits while minimizing social costs ( Northouse). I feel that the CEO put the money where it will have the best result for the largest number of citizens. With that said, putting money to going green, will benefit the company by reducing costs and also is taking a step forward to making the environment cleaner.
ReplyDelete-Steve Fagiano
I agree with you Kyle. Transformational Leadership style would be great in this situation. Transformational leaders usually have a high standard of moral and ethical conduct. To use the factor Idealized Influence, and act as a strong model can make these companies green in the long run.
ReplyDelete