Group

If you have not read the article ’’

Read it before we start.
‘Executive Pay in Action... the Case of Astra Zeneca’

BSS064-6
Leading and Managing Organisational Resources
(LMOR)

Challenge Questions:

Use the chat box What do you think this unit might involve?
Session Outline/ Objectives

 To have an overview the unit and how sessions will run

 To develop an understanding of corporate governance

 Small Group Discussion/ Activity To embed learning of corporate

governance

 Plenary/ Opportunity to ask questions

LMOR Unit Structure
 Week 1: Corporate Governance:
finance,
ethics,
sustainability
 Week 2: Leadership:
traditional perspective,
regenerative leadership,
contemporary leadership in technology sector
 Week 3: Consolidation and Assignment 1 workshop
LMOR Unit Structure (TBC)
 Week 4: Managing Performance and Productivity
Performance management
Operations
Business Analytics and Data Driven Decision Making
 Week 5: Managing Change
Power and Politics
Manage the change process
Organisational culture
 Week 6: Consolidation and Assignment 2 workshop
Assessment 1 40% Due: 10am 14 Oct. 2022 Friday
 Assessment Task:
You will build an e-portfolio throughout the unit with a mandatory
summative assessment in week 3 using one assessment type:
 Professional emails (2400 words) which address the topics
covered in Week 1 and 2 in the format of an essay.
 Assessment 2 60% Due: 10am 4 Nov. 2022 Friday
 Assessment Task:
Please review the case study “Case Study for Business Report:
WeWork” and prepare case study analysis with a business report
of 3600 words based on the topic below:

 ““Effectively and efficiently develop sustainable leadership

initiatives to improve the resource management, enhance
productivity and performance with a focus on finance
performance and people.”
 Objective 1:
An overview the unit and how sessions will run

Assessment Areas

 Application of Theory (35%)

 Analysis (35%)

 Conclusions (20%)

 Recommendations (10%)
LMOR reading list :BREO Books and Tools
How to study and do well in this unit

Prepare for the week+ Reflection

Unit teaching schedule and activities
 Weekly session outlines: Introducing the range of topic
 Self study: Essential readings/guided reading
 Activities
 Independent wider reading

BREO Weekly topics:

 Weekly session outlines: Introducing the range of topic
 Videos, journal articles for the activities
 Objective 1:
An overview the unit and how sessions will run

Small Group Session Directions

 Following placement in a small group:

Take it in turns to introduce yourself to your group

As a group address the task set
Be prepared to feedback to the whole group (you might decide to
select a spokesperson
How to succeed in this Unit?
 Time management
 A thorough understanding of the theories/framework etc.
 Integrating the theories with the examples, critical thinking and analysis
Skills to develop in this Unit

 Academic skills
 Numeracy Skills
 Research skills
 Employability embedded throughout
 Digital Literacy
 EDI & Sustainability
Your responsibilities
 For every 1 hour of teaching you are expected to do 5 hours
of self study. Follow up lectures with self-directed study
– readings​
 ALWAYS check your University email account and email your
Unit Co-ordinator and unit teaching team via UoB email ​
 You are expected to read, study and be prepared to contribute to
all sessions.
 Your attendance and engagement are monitored​
 Be on time to all classes​and participate!​
 Please bring notebook, tablets or laptop for class activities
 Assignments: avoid academic misconduct: Plagiarism:
quote others or own previous work without paraphrasing or
referencing ​
You ask, We answer

 You ask: what is the weighting of the two assignments? will they be
both marked?
 Stella's answers: The 21-22 UIF can be found on BREO link. The
e-portfolio is split into 2 submissions in Week 3 (40% weighting)
and 2 submissions in Week 6 (60% weighting). Both assessment 1
and assessment 2 will be marked.
This session begins

 Any QUESTIONS?
 Objective 1:
An overview the unit and how sessions will run

Small Group Session - Practice

Challenge Question:

What is the purpose of business/ organisations?

Timing: 10 minutes
Introduce yourself briefly (What is your name? How many units have you
studies) and discuss the question.
 Objective 1:
An overview the unit and how sessions will run

Challenge Question:

What is the purpose of business/ organisations?

• To make a profit?
• To make a difference to the local area
• To make a difference to the world/ to protect the world?
• To develop new products/ be innovative?
• To provide employment?
 Objective 1:
An overview the unit and how sessions will run

Activities Week 1

Activity Topic and Activity

1 Basics of Corporate Governance Presentation

 2 Online lecture 1: Corporate Governance Overview

 3 Online lecture 2: The Importance of Managing Working Capital Effectively

 4 Read the Sunday Times article titled Astra Zeneca’s boss cashes in on righteousness

 6 Watch the TEDx Talk on The Social Responsibility of Business

 7 Read the article on The New Role for HR following the COVID-19 pandemic with a focus on the
Doughnut Economy
 8 Explore the folder Interesting articles and videos and engage with these learning materials
 Objective 2:
To develop an understanding of corporate governance

Why the recent interest on Corporate Governance?

 Financial crisis brought to the spotlight the failure in Governance in
the collapse in organisation (such as banks, government
organisations and private businesses).
 E.g- provide some examples
 Discuss in small groups

The collapse of both financial and non financial institutions has

made case for revisiting the issues/concepts from a regulatory
perspective
 Objective 2:
To develop an understanding of corporate governance

What is Corporate Governance?

 Corporate Governance is the framework within which companies
are directed, controlled the and held to account.

 Corporate Governance has a more strategic and overarching

function than the day to day delegation of tasks

 The aim is to steer the company in a direction consistent with their

mission and values to build trust with all stakeholders


“Good Governance is …seen as been held accountable”
Clegg. S. et al. Managing Organisations (4th ed. P293)
What is Corporate Governance?

 From the policy perspective, 

 it is a system through which firms are managed and controlled by
the different stakeholders. 
 From the economic perspective,
  it is a system through which shareholders ensure of obtaining an
appropriate return for their investment from the managers that run
the firms. 
 The interests of shareholders and managers need to align. 
 These interests are most often analyzed as principal and agents
relations, the shareholders representing the principal, and the
mangers representing the agent (Johnson et al, 20220)
 Are governance structures the same in financial and non-
financial firms?
• Are the same CG recommendations applicable to both sectors?
• Has the crisis changed the way financial and non-financial firms are
governed?
• A corporate governance policy puts procedures and policies in place
to keep the company on track and operating efficiently. A good
corporate governance policy should address financial management,
conflicts of interest, hiring practices, and roles of board members.
Policies related to corporate governance,
• Including the areas of board structure and functioning,
• Committees,
• Compensation policy,
• Anti-takeover devices,
• Shareholder rights and Corporate Social Responsibility. 
 Objective 2:
To develop an understanding of corporate governance
The 4 Ps

 People

 Purpose

 Process

 Performance

Source: https://blog.v-comply.com/principles-cg/
 Objective 2:
To develop an understanding of corporate governance

Corporate Governance for a UK Company..

Remuneration
Committee:
Typically
Non – Executives
NEDs + HR
Areas of Corporate Governance
 Objective 2:
To develop an understanding of corporate governance

The corporate governance problem (1)..

Trust in large business and corporate behaviour has significantly eroded,
both in the UK and elsewhere based on:
 ongoing corporate financial scandals (e.g. Sports Direct, BP, Carillion,
Patisserie Valerie, Lex Greensill);
 A growing pay gap with growth of top executive pay whilst average
worker pay has stagnated;
 increasing job insecurity for ordinary workers: more than 8M workers
out of a workforce of 34M in the UK are on ‘zero hours’ contracts…
Failure to ensure ‘fair pay for
UK supply chain workers

Leading UK housebuilders
2 Sisters Food
fail to honour house
Group & processing
warranties and rectify
of outdated chicken:
house defects 2021
2017
 Objective 2:
To develop an understanding of corporate governance

The corporate governance problem (2)..

 how people feel they are being treated & managed at work (the
psychological contract);
 how their skills are being used &
 what opportunities they have for progression all add to this.

The receiver in charge of 2017: Foxconn, a main

collapsed firm Carillion supplier for Apple's
said further 452 jobs were iPhone, says it has
being lost last week. Today stopped interns from
it was revealed number is working illegal overtime
nearing 1,000 at its factory in China.

.
 Objective 2:
To develop an understanding of corporate governance

What is Corporate Greening?

 The aim corporate greening is to establish a more sustainable
mode of business

 It is an attempt for business leaders play a leadership role in

eforming the way a business carries out it’s activities.

 “…seeks not only to comply with governmental or industry

regulations …but also to develop more proactive sustainability
approaches”
Clegg. S. et al. Managing Organisations (4th ed. P399)
 Objective 2:
To develop an understanding of corporate governance

Rules re Corporate Governance = Out of Date (1)

 Ensuring ‘good governance’ has been viewed in past as
compliance to rules and mechanisms such as through the UK
Corporate Governance Code (based on Cadbury Report of early
1990’s)..
 Easier when ways in which businesses were organised and run
tended to converge on common ideas of:
 hierarchy,
 command & control, and
 standardisation – indeed, principles of rules & policies to govern
behaviour inherent in this thinking.
 Objective 2:
To develop an understanding of corporate governance

Rules re Corporate Governance = Out of Date (2)

In 25 years since current approach developed, much has changed:
 much more growth in smaller private enterprise & greater job
mobility;
 new organisational forms & philosophies have emerged which
aim to humanise work more, create more flexible & diverse corporate
cultures, to better engage the employee as key stakeholder and to
give them (employee) voice.
 These approaches lead to greater agility and responsiveness, and
enable innovation, as well as being better for people themselves.
 Corporate value has also significantly shifted from the tangible to
the intangible, yet
 agreed systems & metrics we use = still very predominantly focused
on the tangible e.g. adherence by firms to ‘shareholder value’.
 Objective 2:
To develop an understanding of corporate governance

Rules re Corporate Governance = Out of Date (3)

Mostly have to rely on whatever organisations want to report via:
 annual reports and
 narrative, which is invariably inconsistent and hard to compare.

Need to define & encourage more consistent reporting & transparency on:
 how organisations changing,
 how they are investing in their people,
 make-up of their workforces, & how they are living to principles of what
‘good work’ should be.
Are growing calls from investor community, + other stakeholders who
don’t see their interests recognised /accounted for.
Mechanism = to help to define more common frameworks & metrics to
understand all dimensions of human capital & organisation.
 Objective 2:
To develop an understanding of corporate governance

Importance of corporate governance

 Corporate governance = vital thread from top of any
organisation , large or small, via the Board and the executive
which have primary responsibility & accountability for:
 decisions,
 actions and
 behaviours of the organisation.

2016: Asda– Employment

Tribunal concluded workers in
Asda’s shops, mainly women,
could compare themselves to
male workers in Asda’s
distribution centres. 
 Objective 2:
To develop an understanding of corporate governance

What good corporate governance means..

Good governance = about clarity, accountability, and

transparency:

 clarity of the organisation’s purpose, and

 the values & principles which drive it;
 accountability for all the organisations stakeholders not just
the financial stakeholders; and
 transparency in understanding and demonstrating how the
organisation lives up to the purpose, values and principles that
drive it.
 Objective 2:
To develop an understanding of corporate governance

CIPD Response to Government ‘Green Paper’ on Corporate Governance Reform

 CIPD made response in Feb 2017 following the PM Theresa May’s

statement that
“in order for business to regain the trust of the public, organisations
have a responsibility to balance their economic needs with social
accountability.”
 Objective 2:
To develop an understanding of corporate governance

CIPD Recommendations to Government re

Corporate Governance (1)

 All publicly listed companies to be required to establish a

standalone human capital development sub-committee, chaired
by HR director, with same standing as all board sub committees;
 Government should set voluntary human capital (workforce)
reporting standards to encourage more publicly - listed
organisations to provide better information on how they invest in,
lead and manage their workforce for the long-term.
 Publicly listed companies should be required to have at least one
employee representative on their remuneration committee.
 Objective 2:
To develop an understanding of corporate governance

CIPD Recommendations to Government

re
Corporate Governance (2)
 Publicly listed companies required to publish ratio between pay of
their CEO and median pay in their organisation. Other ratios should
be considered in due course– top to bottom, and top to senior
management team, as well as the ratio been top pay and those in
under-represented or minority groups such as BAME, for example
  The Remuneration Consultants Group’s code of conduct be
reviewed to encourage remuneration advisers to balance external
drivers for pay increases such as benchmark data, with internal
contextual measures providing insight on the reward and
contribution of the wider workforce. 
 Objective 2:
To develop an understanding of corporate governance

CIPD Recommendations to Government

re
Corporate Governance (3)

 The FRC’s (Financial Reporting Council) recently announced

(2016) review of the UK corporate governance code should
consider whether a more principles-based should be adopted,
placing greater emphasis on the importance of organisations’
human capital investment and development.
 Useful Additional Reading

 CIPD (2013) The role of hr in corporate responsibility. London:

CIPD
 Li, W., Young, S. (2016) An analysis of CEO pay arrangements
& value creation for FTSE-350 companies. London: CFA
 CIPD (2020) Good work index (survey). London: CIPD
 Break 11:45 to 12:20
 The session will start by 12:20
 Objective 3:
To embed learning of corporate governance

Small Group Session –

‘Executive Pay in Action... the Case of Astra Zeneca’
Challenge Questions:
What have Astra Zeneca contributed to society?
What decisions did the Astra Zeneca CEO make about the vaccine?
Should the Astra Zeneca CEO received the pay rise that he did?
Should Astra Zeneca investors have benefitted financially from the
success of it?
Should/ have the Astra Zeneca employees benefit/ted from the success
of the vaccine?
Will the Astra Zeneca investors benefit from the success of the
vaccine?
Any other points about the vaccine/ article?
Timing: 45minutes
Introduce yourself briefly (What is your name? How many units have you
studies) and discuss the questions. Be prepared to feedback to the group.
Session Outline/ Objectives

 The Link to Prior Learning –

Review Learning of Corporate Governance

 To direct future learning of finance

 Plenary/ Opportunity to ask questions

 Objective 2:
To direct future learning of finance

Finance

Challenge Question:

What are the main financial considerations for a business?

Use the chat box

 Objective 2:
To direct future learning of finance
COST - Terms
There are 3 Types of Costs:

 Fixed Costs – These are the costs that stay the same no matter how much you
make or sell. E.g. rent, salaries, business rates. They still have to be paid even if
the business makes no money
 
 Variable Costs – These are the costs that change according to how much you
make/sell. E.g. materials, production costs. Variable costs are calculated using
the following formula:
Total Variable Costs = Variable Cost x Quantity

 Total Costs – this is the fixed and variable costs added together. You can’t work
this out until you know both the fixed and variable costs. It is calculated by using
the following formula.
Total Costs = Fixed Costs + Variable Costs (Variable Cost x Quantity)
 Objective 2:
To direct future learning of finance

Managing Working Capital

Working capital is defined as current assets less current liabilities.

The major elements of current assets =
 inventories
 trade receivables;
 cash (in hand & at bank).

Major elements of current liabilities =

 Trade payables
 Bank overdrafts / short term loans

44
 Objective 2:
To direct future learning of finance

‘Working Capital’

Basically, this comprises 4 elements =

• Trade Receivables (invoices to be paid to ‘your’ company.
• Inventory (stock held; including tangible goods + intangible
intellectual property).
• Cash and Bank Balances (money in the possession of ‘your’
company).
• Trade Payables (what ‘your’ company owes to suppliers).

Lack of ‘working capital’ based on ‘trade payables’ versus ‘trade receivables’

(previous slides) was responsible for the collapse of Lex Greensill in 2021.

45
 Objective 2:
To direct future learning of finance

Importance of working capital

Working capital represents a significant investment for
companies so it needs management. There are a number
of factors that may threaten this management, including
changes in:
 interest rates (currently at all time low in UK of 0.5%) ;
 market demand for business output;
 the seasons (re customer purchasing decisions..);
 the state of the economy (growth / recession etc.);
 currency rates (in past c. 3 years euro has been worth in
range 64p – 94p… .).

46
Objective 2:
To direct future learning of finance
 Objective 2:
To direct future learning of finance

Financial Statements
 Financial statements provide information about your current financial
position

 They can be used to present a summary of your income and outcomes

 They can be used to help forecast the future financial position of the
company

 Forecasts are useful to complete tax returns and to apply for loans
 Objective 2:
To direct future learning of finance
CASH FLOW FORECAST

DEFINTION: Cash flow is money flowing in and out of a business.

A Cash Flow Statement is a plan showing all the expected cash
receipts and cash payments in a firm over a period of time. It is a
business’s estimate of the future timing and source/nature of its
income and expenditure.
CASH FLOW IS NOT PROFIT
PROFIT is calculated by recording all transactions that will lead to cash going in or out of the business
either at that moment or at some point in the future.
CASH FLOW is all the money flowing into and out of the business over a period of time, calculated at the
exact time the cash enters or leaves the bank account/till.

https://www.youtube.com/watch?v=oPGgKclWg3M
Cash Flow – The Kaplan Group
 Cash Flow Definitions

• CASH INFLOW (RECEIPTS): A flow of cash into the business

 
• CASH OUTFLOW (EXPENSE): A flow of cash out of the business
 
• CASH FLOW FORECAST: A future prediction of how cash might flow
into and out of a business. This may be set out in a chart or graph
 
• CASH SURPLUS: A situation when the cash inflow is greater than the
cash outflow
 
• CASH DEFICIT: A situation when a business finds itself short of cash
because the outflow is greater than the inflow
 Objective 2:
To direct future learning of finance

Benefits and Limitations of Cash Flow Forecasts

A cash flow forecast can help both new and existing businesses in several
ways:

 It will help a business to plan its financial activities before problems arise
and predict when the business might suffer from cash shortages.
• Cash flow forecasts can be based on false assumptions about what’s
going to happen.
• Circumstances can change suddenly after the forecast has been made
as costs can rise, machinery can break down or competitors can affect
 Objective 2:
To direct future learning of finance

Budgeting
 DEFINITION: A budget is a target for costs or revenue that a firm or
department must aim to reach over a given period of time. In other
words it is a quantitative economic plan prepared and agreed in
advance.

 BUDGETARY CONTROL/BUDGETING: This is a business system

which involves making future plans, comparing the actual results
with the planned results and investigating any differences/variances.
 Plenary

Opportunity to ask questions

Recap on today’s session

 To develop an understanding of corporate governance

 Small Group Discussion/ Activity To embed learning of corporate

governance
 To direct future learning of finance/working capital
Preparation for Session 3

 Choose ONE organisation from those referred to in the Corporate

Governance Overview Lecture slides (i.e. Boohoo, Sports Direct, BP,
Carillion or Lex Greensill)
give a brief ‘rationale’ (reason) for your choice of company;
search for information on your company
What was the issue at this company?

 Watch the TEDx Talk on The Social Responsibility of Business

 Read the article on The New Role for HR following the COVID-19
pandemic with a focus on the Doughnut Economy
 Group

BSS064-6
Business Ethics, Sustainability, and The Role of HR
(LMOR)
Challenge Question:

1. What do we mean by business ethics?

2. Why have sustainability issues become strategically

important to managerial decision-makers?

10minutes discussion
Session Outline/ Objectives

• To understand the importance of business ethics

• To embed learning of Social Responsibility/ The Doughnut

Economy

• The Link to Prior Learning – Assessment Activity

• Plenary/ Opportunity to ask questions

Meaning of Ethics

 Ethics is the study of morality: practices and activities that are

considered to be importantly RIGHT and WRONG, together
with the rules that governs those activities and the values those
activities relate.
 Ethics as a set of rules or code of conduct
 Guidance in answering the question ‘What should I do?’
Ethics- What do we mean by business ethics?

What is it about?
 Since ethics is concerned with how individuals apply moral values and
codes when faced with an ethical dilemma
Why bother?
• For organizations: huge cost in terms of finance and reputation
• for individual managers: facing ethical dilemmas is common, so they
need to understand the ‘cause of things’ and how to act upon them.
• So, business ethics seeks to explore the implication of general ethics for
the conduct of business.
 Ethical questions in organisations
 Customers – product quality and safety:
– pricing policies - advertising
 Communities – pollution:

– physical environment - closure of operations 

 Government – compliance with legislation:

– implementation of regulations - tax returns  

 Shareholders – honesty:

– providing a return 
 Other organisations – act honestly and fairly:

– honour contracts
 Challenge Question Discussion:

What do we mean by business ethics?

Business ethics refers to the standards for morally right and wrong conduct in business. Law
partially defines the conduct, but “legal” and “ethical” aren’t necessarily the same. Business ethics
enhances the law by outlining acceptable behaviours beyond government control.

A discussion of ethics in business organisation has to take account pf the purpose of the
organisation, as well as its strategy: what it is trying to achieve, usually in their practices and
processes.
An organisation choosing what to do and thus on the consequence for the people in and outside
the organisation (Mullins, 2019).

Corporations establish business ethics to promote integrity among their employees and gain trust
from key stakeholders, such as investors and consumers.

• Business ethics drives employee behaviour

• Business ethics benefits the bottom line
 Social Responsibility of Business

Small Group Discussion

Milton Friedman (USA – Chicago School of Business)
The Social Responsibility of Business is to Increase Its Profits”
(make money as much as possible for its shareholders). Within the
law, and the rules of the game (fair competition, no deception or
fraud. A shareholder centred view.
… a company has no social responsibility to the public or
society; its only responsibility is to its shareholders.

Timing: 5mins
Introduce yourself briefly and discuss the question based on the statement
Try to agree and disagree, before forming your opinion. Challenge each
other.
Task:
Watch the TEDx Talk on The Social Responsibility of Business
What are the key points raised?

https://www.youtube.com/watch?v=Z5KZhm19EO0
18 minutes

If you cannot see it or hear it, put the link in your browser. We will review it in 20
minutes.

Alex Edmans
London Business School
The Social Responsibility of Business

What were the key points from the Ted Talk?

Why do businesses exist?

 The Social Responsibility of Business

 Business is naturally caring: it makes good products to satisfy it’s

customers
 It keep workers happy to retain them
 If it damages the planet, it’s brand is hurt
 Former Chairman of Marks and Spencer, Simon Marks ‘Reduced
priced meals for staff’
 George Merck, President of Merck Pharmaceuticals, invented
penicillin. Shared the secrets of how to make it with competitors.
 Focus on Social Responsibility and profits will follow
 You cannot measure the bottom line
 Social Responsible Companies perform better: (1 element)
100 best companies to work for in USA
 Businesses exist to serve a purpose and only by doing so will they
make long-term profit
 Challenging question:Why have sustainability issues become strategically
important to managerial decision-makers?
 Importance of Sustainable Strategy
 Sustainability in business involves the impacts an organization has on society or the environment. A
sustainable business strategy positively impacts both the environment and society, thus helping address
various problems pressing the world. These problems include climate change, pollution, human rights, and
gender inequality. Many organizations have adopted this strategy during their decision-making processes.
 Answer and Explanation:
Sustainability helps to drive social and environmental change and contributes to the overall success of an
organization. The most sustainable organizations are the most profitable in today's business environment.
Governance, social and environmental factors often determine an organization's ability to be ethical and
sustainable. Hence the need for organizations to consider them during decision making.
• It protects a brand and helps mitigate risks: Being involved in a public scandal is the worst thing an
organization can face in business. It damages the reputation and costs them, customers. Implementing a
sustainable strategy that can help protect the environment or society also helps protect an organization from
scandals or damaging incidents.
• Sustainability acts as a competitive advantage: The sustainability aspect cannot distract from organization
goals, and filling an organization with purpose help attract skilled and motivated employees that drive
success. Making an organization impact society positively instead of where employees get their paycheck is
a competitive advantage, especially when attracting a talented workforce.
• Sustainability does not necessarily mean sacrificing revenue or putting business success at the back.
Instead, it is a crucial element of a successful strategy. A reluctant business to factor in sustainability is likely
to have slow growth, profitability, and less employee retention.
 Corporate Social Responsibility

 Corporate social responsibility deals with the theory that organizations and their
employees should partake in activities and initiatives that benefit society at large.
Corporations that engage in social responsibility (CSR) often have employees who
are motivated and more likely to be productive. In addition, when a company has a
commitment toward social responsibility, it resonates with the employees, who also
take on a more positive role when it comes to individual and organizational
responsibility.
 Triple Bottom Line

This links to corporate governance and

corporate finance.

Triple bottom line (TBL) is a sustainability-related construct that was coined by Elkington
(1997).
 TBL theory holds that if a firm looks at profits only, ignoring people and the planet, it
cannot account for the full cost of doing business
 A challenge to this approach is that is difficult to measure TBL.
 Example of company that applies this concepts
 LEGO has made a commitment to reducing its carbon footprint and is working towards
100% renewable energy capacity by 2030.
 Mars
 Mars Incorporated (privately held; McLean, Va.) has a sustainable cocoa initiative
called Cocoa for Generations.
Doughnut Economics/ ‘The New role for HR following the
Covid-19 Pandemic’
 Objective 3:
To embed learning of Social Responsibility/ The Doughnut Economy

Small Group Discussion

TASK: Read the article – The Doughnut
Economy

What is the ‘Doughnut Economy’?

What were the main points made about HR in the article?
What are your recommendations for the role of HR?
How can these ideas be implemented in an organisation?

Timing: 20 minutes
Discuss the question based on the article ‘The New role for HR following the Covid-
19 Pandemic’.
Feedback to the group
‘The New role for HR following the Covid-19 Pandemic’
The model suggests that we should focus our energies on ensuring that the world and its people
live within the boundaries of the Doughnut.
‘The New role for HR following the Covid-19 Pandemic’
– Key Principles
 Pre-covid of responsibility of HR to focus on cost control and
shareholder return
could this be a catalyst for change?
 ‘Neoliberalism’ outlook in the world ‘everyone benefits’ from successful
economies
 Now is the time for HR professionals to re-assert their leadership to
create sustainability for organisations and their people
 Covid – Evidence of Inequality
People being put on furlough or ‘fired’
People losing jobs are the lowest paid workers
Socially deprived more likely to catch covid
 Covid – Evidence of Changing Mindset
Appreciation of key workers
Togetherness
 ‘The New role for HR following the Covid-19 Pandemic’
Applying Doughnut to business:
 Structure the business so it has a positive effect on boundaries and protects its stakeholders.
 Define and communicate the purpose of the business and the values. Ensure everyone has
these as their mantra.
 Have a plan for cash and source of funds that is diverse with providers who are willing to play
the long game with the company.
 Build powerful internal and external networks.
 Make sure everyone in the business and its supply chain is paid enough so they do not go to
bed at night worrying about how they will pay their bills.
 Fair payment of taxes
 Encourage employee ownership of the business and ensure that the balance of ownership
does not distract from the purpose and values of the business – even when times are tough.
 Make your business distributive and regenerative by design – it is planned into the business
design how value will spread to all stakeholders and in the product life cycle there is no waste.
Assessment – Week 1
Critical analysis and discussion of Corporate Governance and Sustainability in the context
of contemporary organisations
You now need to consider the companies you are going to write to
which have corporate governance and leadership issues. 
You can use the companies discussed in week 1 (and in the PPT)
including: 
Board level corporate governance issues. in your own country
Foxconn, BP, Carillon
Tesco, Sports Direct, Asda
Astra Zeneca, Facebook, Amazon, Alibaba.

You need to read/follow Assignment 1 guidance PPT, upload your

draft of your professional email regarding Corporate governance in
the online journal and discuss with group members how to improve the
evaluation and synthesis. Remember, you need to apply theories
supported by the evidence and justified with in-depth analysis. 
 Assessment – Week 1

• Subject line:
For example: how to enhance corporate governance addressing the needs
of multiple stakeholders?
• Introduction and Purpose of the email, presenting an evidence-based
argument, convincing the recipients
• Critical analysis and evaluation, including in-text citations to quality
academic and practitioner references to support your argument on
corporate governance and can focus on a couple of topics
• Conclusion of main arguments/analysis
• Recommendations – Options/Choices
Assessment – Week 1 Requirements

 Email format
(Subject line/ To From)

 Professional style
(Add positions in the company)

 Academic content
Theory (In-text citations)
Evidence
Theoretical Area Theory/ Evidence
Corporate Governance Agency Theory
Stewardship
Stakeholder/Shareholders theory

Finance/ Sustainability Triple Bottom Line

Sustainability/ Corporate Social Responsibility

Triple Bottom Line
Stakeholder Theory
Alex Edmunds/ TedTalks
Doughnut Economics/ HR
Directorate

Task: What can you find out about these theories?

Assessment – Week 1 Requirements

Open your online journal.

Start writing your professional email.

 Session Outline/ Objectives Review

• To understand the importance of business ethics

• To embed learning of Social Responsibility/ The Doughnut

Economy

• The Link to Prior Learning – Assessment Activity

• Plenary/ Opportunity to ask questions

 Useful Additional Reading
• Caldwell, C., Hayes, L. A., Karri, R., & Bernal, P. (2008). Ethical
stewardship- implications for leadership and trust. Journal of
Business Ethics, 78, 153–164.
• Elkington, J. (1997). Cannibals with forks – Triple bottom line of
21st century business. Stoney Creek, CT: New Society Publishers.
• Fong, E. A. and Tosi, H. L. (2007). Effort, performance and
conscientiousness: An agency theory perspective. Journal of
Management, 33, 161–179.
• Henriques, A. (2007). CSR, sustainability and the triple bottom line.
In Henriques, A., and Richardon, J. (Eds). The Triple Bottom Line:
Does it All Add Up? London: Earthscan. (pp. 26-33).
• Hernandez, M. (2008). Promoting stewardship behaviour in
organisations: A leadership model. Journal of Business Ethics, 80,
121–128.
 Agency theory 
 Agency theory studies the problems and solutions linked to delegation of tasks
from principals to agents in the context of conflicting interests between the
parties. Beginning from clear assumptions about rationality, contracting, and
informational conditions, the theory addresses problems of ex ante (‘hidden
characteristics’) as well as ex post information asymmetry (‘hidden action’),
and examines conditions under which various kinds of incentive instruments
and monitoring arrangements can be deployed to minimize the welfare loss.
 The agency theory of corporate governance was put forward by Alchian and
Demsetz (1972) and Jensen and Meckling (1976). They argued that firms can
be regarded as a nexus for a set of contracting relationships among
individuals, whereas classical economics regards firms as single-product
entities with the purpose of maximizing profit (Learmount, 2004).
 Agency theory explains the behaviour of a firm from the perspectives of
various contracts between Shareholders who contribute funds for a firm to
Stewardship theory

 Stewardship theory is a framework which argues that people are

intrinsically motivated to work for others or for organizations to
accomplish the tasks and responsibilities with which they have
been entrusted. It argues that people are collective minded and
pro-organizational rather than individualistic and therefore work
toward the attainment of organizational, group, or societal goals
because doing so gives them a higher level of satisfaction.
Stewardship theory therefore provides one framework for
characterizing the motivations of managerial behavior in various
types of organizations.
 Shareholder theory

Shareholder theory was first introduced in the 1960s by economist 

Milton Friedman. According to Friedman, a company should focus primarily
on creating wealth for its shareholders. He argues that decisions about social
responsibility (like how to treat employees and customers) rest on the
shoulders of shareholders rather than company executives. Since company
executives are essentially employees of the shareholders, they’re not
obligated to any social responsibilities unless shareholders decide they
should be. 
 Stakeholder theory

 Stakeholder theory was first introduced in 1984 by a business professor

named Dr. R. Edward Freeman. According to Freeman, companies should
focus on creating wealth for all their stakeholders, not just shareholders.
He argues that there are interconnected relationships between a business
and its customers, suppliers, employees, investors, and the local
community. For example:
• You want customers to be satisfied with your product and your company
so they keep buying from you. 
• You want employees to be happy and motivated at work so they can bring
their full energy and creativity to the table. 
• You want to help your financiers, partners, and shareholders make a profit
so you can keep your investors and get more opportunities for growth.