Topic 7

1. Industry Studies: Consumer Goods Industry
Topic: Regulatory and ethical
contexts and managing a global
reputation
Topic Number: 7

2. Overview
One of the major challenges that consumer goods organisations
operating globally need to face is the different regulatory regimes
around the world. Furthermore, different countries also have a
range of ethical stances that they adopt which can be very different
from the home country a consumer goods company operates in.
In many instances companies have had to adapt their business
practices or even had to pull out of certain countries as the
requirements have conflicted with their own internal policies. It is in
this lecture that we will explore these issues further. We will also
look at the importance of managing a global reputation given the
rate and pace with which news travels globally.
Finally we will evaluate whether business and ethics are able to go
hand in hand.
2

3. Learning Outcomes
3
• Understand and communicate the various ethical
and regulatory environments and how they differ
from each other
• Evaluate the consequences of poor reputation
management
• Determine and present an understanding of the
role of ethics and business for the CGI

4. Business Ethics
In law a man is guilty when
he violates the rights of
others. In ethics he is guilty
if he only thinks of doing so.
Immanuel Kant
Corporate executives and
business owners need to
realise that there can be no
compromise when it comes
to ethics, and there are no
easy shortcuts to success.
Vivek Wadhwa

5. What is business ethics?
• Ethics: an individual’s
personal beliefs about
whether a decision, behavior,
or action is right or wrong
• Ethical behavior: behavior
that conforms to generally
accepted social norms
• Unethical behavior:
behavior that does not
conform to generally
accepted social norms

6. Ethical Generalisations
• Individuals have their own personal belief system
about what constitutes ethical and unethical behavior
• People from the same cultural contexts are likely to
hold similar beliefs as to what constitutes ethical and
unethical behavior
• Individuals may be able to rationalize behaviors based
on circumstances
• Individuals may deviate from their own belief systems
based on circumstances
• Ethical values are strongly affected by national
cultures and customs

7. Ethics in Cross-Cultural and International
Contexts

8. Behavior towards employees
Hiring Practises
Career
Development
• Equal opportunities
• Fair recruitment
practices
• Same process for all
• Equal opportunities
• No glass ceiling
• Pathway to progression

9. Behavior towards employees
Compensation &
Benefits
Workers Rights &
Dignity
• Fair compensation
• Relevant benefits
• Fair terms
• Working environment
• Working conditions
• Employee treatment

10. How Employees Treat the Organization
Conflict of Interest Confidentiality Honesty
A conflict of interest
occurs when a decision
potentially benefits the
individual to the possible
detriment of the
organization.
Ensuring that one
keeps company
secrets confidential
Doing the right thing
by the business.
Perspective differs
depending on the
circumstances and
culture

11. Employees, the Organization, & Other
Economic Agents
Customers Competitors
Suppliers Trade Unions

12. Managing Ethical Behavior Across Borders:
Guidelines and Codes
Written Guidelines Codes of Ethics
• Compliance with
regulations
• Conflicts of interest
• Outside directorships
• Corporate
opportunities
• Honesty
• Integrity
• Promise-keeping
• Loyalty
• Fairness
• Caring
• Respect
• Law abiding

13. Managing Ethical Behavior Across Borders:
Guidelines and Codes
Organisation Practises: Say one
thing do another?

14. Managing Ethical Behavior Across Borders:
Guidelines and Codes
Corporate Culture

15. The Corporate Reputation

16. What is corporate reputation management?
Reputation management is the understanding or influencing of an
individual's or business's reputation. It was originally coined as a
public relations term, but advancements in computing, the internet
and social media made it primarily an issue of search results. Some
parts of reputation management are often associated with ethical
grey areas, such as astroturfing review sites, censoring negative
complaints or using SEO tactics to game the system and influence
results.

17. Brand Vulnerability Index
Source: Burson Marsteller, 2014

18. Calculating your Brand Vulnerability Index
Score

19. 6 principles for managing a reputation
The great majority of business decision-makers feel it is now
much harder to manage news flow and reputation, and that
the internet, social media and the need to respond extremely
quickly are key challenges.
Real-time Transparency
Not only do rumours spread
fast, they are also going
global at frightening velocity.
Channeled through online
communities and affinity
groups and escalated via
micro-blogs and search
engines.
Under pressure from
governments, NGOs, activists
and other stakeholders,
organisations are being forced
to be more open about their
activities. It is also much
harder for organisations to
keep secrets.
Source: WPP, 2014

20. 6 principles for managing a reputation
Accountability Professionalism
Many types of organisations
are being made to be more
accountable for their actions,
and to involve stakeholders to
a greater extent in the
decision-making processes.
Consider how social media is
being used…
NGOs and activists are
becoming increasingly adept
at using the plethora of
channels and tools at their
disposal to increase
awareness of their campaigns
and activities, organise and
activate support and raise
money.
Source: WPP, 2014

21. 6 principles for managing a reputation
Consistency Culture & Operations
Nowadays, people have
access to not just the greater
amounts of information, but
also, thanks to the internet
and search engines, to much
of the same information.
There’s also the ever greater
array of gatekeepers busily
patrolling Wikipedia and other
key information gateways.
Some firms are well-suited to
the new spirit of openness
and authenticity – especially
relatively flat organisations
that place a premium on
internal knowledge-sharing
and open external
relationships.
Yet the majority are struggling
to identify and put in place
the appropriate structures,
protocols and tools to meet
the challenges.
Source: WPP, 2014

22. Creating a competitive advantage:
Gain better employees?
Source: Net Impact, 2013
Do you
agree?

23. Creating a competitive advantage:
Differentiate from competitors?
Source: Marks and Spencers, 2014

24. Creating a competitive advantage:
Differentiate from competitors?
Source: Marks and Spencers, 2014

25. End of presentation
© Pearson College 2013