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with　the　German　government　being　party　to　both　strategies　through　the　
participation　of　that　country’s　energy　giant；　E。ON。　All　the　while；　Shell　was　
under　pressure　to　match　its　historic　profit　growth。　Authenticity　Consulting　
（authenticityconsulting/misc/long。pdf）　has　a　useful　checklist　to　
help　with　decisions　about　resolving　stakeholder　conflict。　
Whistle…blowers　–　an　ethical　longstop　
Not　surprisingly；　the　people　most　likely　to　know　about　unethical　or　socially　
irresponsible　behaviour　are　those　working　in　the　organization　itself。　Governments　
around　the　world　have　adopted　measures　to　encourage　a　flow　of　
information　on　ethical　problems　and　fraud　from　whistle…blowers　–　that　is；　
anyone　employed　or　recently　employed　by　a　public　body；　business　organization　
or　charity　who　reveals　evidence　of　wrongdoing。　Whistle…blowers　
have　also　been　given　a　measure　of　legal　protection。　In　the　United　States　
the　Lloyd–La　Folle。。e　Act　of　1912　started　the　ball　rolling；　giving　federal　
employees　the　right　to　provide　Congress　with　information；　to　be　followed　
by　a　patchwork　of　laws　covering　such　fields　as　water　pollution；　the　environment；　
the　Sarbanes–Oxley　Act　（2002）　to　deal　with　corporate　fraud　and　the　
Whistleblower　Protection　Enhancement　Act　（2007）。　In　the　UK　the　Public　
Interest　Disclosure　Act　（1998）　and　various　laws　enacted　by　the　European　
Union　and　other　governments　provide　a　framework　of　legal　protection　for　
individuals　who　disclose　information。　
Many　firms　too　have　established　ways　to　a。。ract　information　on　frauds　
being　mi。。ed　against　them；　including　24…hour　hotlines　and　corporate　
ethics　offices。　For　example；　Vodafone’s　（vodafone/start/　
responsibility/supply_chain/whistle…blowing。html）　‘Speak　Up’　programme　
–　launched　in　2006/07　–　provides　suppliers　and　employees　working　in　its　
supply　chain　with　a　means　of　reporting　any　ethical　concerns。　Fewer　than　10　
Ethics　and　Social　Responsibility　231　
incidents　were　reported　in　2006/07。　That　low　figure　may　be　less　to　do　with　
the　absence　of　ethical　problems　and　more　to　do　with　the　deeply　ingrained　
biases　against　whistle…blowing　and　a　distrust　of　assurances　that　retribution　
will　not　follow；　especially　in　areas　far　removed　from　the　watchful　eyes　of　a　
corporate　ethics　office。　
These　organizations　can　provide　further　background　on　the　subject：　
。　The　National　Whistleblowers　Centre　（whistleblowers）：　
Focuses　on　exposing　government　and　corporate　misconduct；　promoting　
ethical　standards　and　protecting　the　jobs　and　careers　of　whistle…blowers。　
。　Spinwatch　（spinwatch）：　Monitors　the　role　of　public　relations　
and　spin　in　contemporary　society　and　has　worked　with　whistle…blowers；　
anonymously；　on　some　of　the　most　contentious　issues：　Northern　Ireland；　
the　role　of　the　media；　genetic　engineering；　the　oil　industry；　tobacco　
smuggling；　food　and　farming；　and　the　war　in　Iraq；　for　example。　
。　Whistleblower　（whistleblower。uk）：　Run　by　journalists　and　set　
up　to　allow　people　to　sell　stories　to　the　media　confidentially。　It　has　had　
a　measure　of　success；　breaking　the　story　on　how　the　Richard　and　Judy　
Show’s　‘You　Say；　We　Pay’　petition　was　ripping　off　viewers。　
。　Wikileaks　（wikileaks）：　Its　primary　interest　is　in　exposing　
oppressive　regimes　but　it　offers　an　avenue　for　anyone　who　wishes　to　
reveal　unethical　behaviour　in　their　governments　and　corporations；　with　
a　degree　of　anonymity。　
DOES　BEING　ETHICAL　PAY　OFF？　
There　is　plenty　of　anecdotal　evidence　that　ethical　and　socially　responsible　
organizations　are　be。。er　places　to　work。　At　the　very　least；　being　ethical　
provides　an　organization　with　an　insurance　policy　limiting　its　exposure　
to　a　range　of　legal　liabilities　for　faulty　products；　misleading　advertising；　
price　fixing　and　discrimination　at　work；　for　example。　But　evidence　on　
whether　being　ethical　helps　a　business　organization　to　bee　and　stay　
more　profitable　is　less　clear。　Corpedia　（h。。p：//welerpedia）；　
a　pliance　and　ethics　training　pany　with　clients　in　60　countries；　
including　RadioShack；　EMC；　Xerox　and　PepsiCo；　produces　an　index　
of　panies　deemed　ethical。　panies　such　as　Intel；　Starbucks；　The　
Timberland　pany　and　Whole　Foods　Market　are　in　its　index；　which　
it　claims　has　outperformed　the　S&P　500　by　more　than　370　per　cent　over　
5　years。　The　rather　more　scientific　and　prehensive　FTSE4Good　Index　
Series　（ftse/Indices/FTSE4Good_Index_Series/Performance_　
Analysis。jsp）　also　shows　the　ethical　panies　to　be　ahead；　though　by　a　
rather　smaller　margin。　Over　the　5　years　to　May　2008；　the　400　panies　in　
the　FTSE4Good　Index　were　about　15　per　cent　ahead　of　the　general　index。
232　The　Thirty…Day　MBA　
But　that　still　begs　the　question　of　what　constitutes　‘good’。　The　FTSE4Good　
Index　sets　out　to　measure　the　performance　of　panies　that　meet　globally　
recognized　corporate　responsibility　standards。　For　inclusion　a　pany　
must　be：　
。　working　towards　environmental　sustainability；　
。　developing　positive　relationships　with　stakeholders；　
。　upholding　and　supporting　universal　human　rights；　
。　ensuring　good　supply　chain　labour　standards；　
。　countering　bribery。　
It　also　excludes　panies　that　have　been　identified　as　having　business　
interests　in　these　industries：　
。　tobacco　producers；　
。　panies　manufacturing　either　whole；　strategic　parts；　or　platforms　
for　nuclear　weapon　systems；　
。　panies　manufacturing　whole　weapons　systems；　
。　owners　or　operators　of　nuclear　power　stations；　
。　panies　involved　in　the　extraction　or　processing　of　uranium。　
This　only　serves　to　highlight　the　problem　of　deciding　what　is　ethical　and　
what　is　not。　For　example；　is　mining　uranium　for　nuclear　power　really　
more　harmful　than；　say；　switching　to　biofuels　which；　aside　from　probably　
releasing　between　two　and　nine　times　more　carbon　gases　over　the　next　
30　years　than　fossil　fuels；　will　almost　certainly　cause　food　prices　to　stay　
high；　particularly　in　the　developing　world？　Or　is　the　motor　industry；　whose　
products　kill　more　people　every　year　than　the　armaments　industry；　a　more　
ethical　and　socially　responsible　sector？　
However；　a　small　but　growing　band　of　business　schools　believe　that　
there　is　enough　mileage　in　social　responsibility　and　ethics　to　launch　‘green’　
MBA　programmes　that　emphasize　a　triple　bo。。om　line；　also　known　as　‘TBL’　
or　‘3BL’　–　profit；　people；　planet。　Antioch　University　（antiochne。edu/　
om/mba）；　New　England；　Dominican　University　（greenmba）；　
California　and　Duquesne　University；　（h。。p：//mba。sustainability。duq。edu）　in　
Pi。。sburgh　are　among　those　offering　such　programmes。
Operations　
management　
。　Outsourcing　
。　Production　methods　
。　Controlling　operations　
。　Maintaining　quality　
。　Information　systems　
To　stay　ahead；　panies　need　to　generate　innovation；　organize　production；　
collaborate　with　other　panies　and　manage　the　performance　of　activities；　
processes；　resources　and　control　systems　used　to　deliver　goods　and　
services。　Operations　management　is　the　catch…all　title　used　to　hold　all　these　
disparate　fields　together。　O。。en　in　business　schools　the　subject　is　afforded　
a　distinct　syllabus　of　its　own；　as　for　example　is　the　case　at　Cranfield　School　
of　Management；　Warwick　and　Bocconi；　in　Milan；　Italy。　At　Cardiff　Business　
School；　Logistics　and　Operations　Management　are　bundled　together　with　
a　strong　emphasis　on　‘Lean　Thinking’　and　in　Barcelona’s　Esade　Business　
School　‘Innovation’　is　the　partner　subject。　
However　the　subject　is　taught；　the　foundations　if　not　the　content　
started　out　with　the　work　of　Frederick　W　Taylor。　Usually　referred　to　as　
the　‘father　of　scientific　management’；　he　studied　and　measured　the　way　
people　worked；　searching　out　ways　to　improve　productivity。　His　book；　
The　Principles　of　Scientific　Management　（1911；　Harper　and　Row；　New　York）；　
showed　how　science　could　replace　apprenticeship　as　the　way　to　transfer　
knowledge　about　how　tasks　should　be　done。　Though　much　misunderstood　
and　misapplied　–　the　Soviet　Union　adopted　his　methods　as　the　foundation　
for　its　five…year　plans　–　Taylorism；　as　his　work　became　known；　was　the　
spur　to　the　many　variants　and　extensions　that　are　today　bundled　under　
operations　management。　
10
234　The　Thirty…Day　MBA　
The　next　big　boost　to　the　discipline　took　place　with　the　introduction　of　
mathematical　models　used　during　the　Second　World　War　to　make　maximum　
use　of　scarce　resources。　Fairly　mundane　tasks；　such　as　removing　bo。。lenecks　
in　tank　production；　led　to　dramatic　increases　in　output。　More　esoterically；　
operations　research；　as　this　branch　of　the　subject　became　known；　was　used　
to　work　out　the　optimum　size　of　convoy　to　evade　destruction　by　German　
U…boats　as　well　as　the　depth　at　which　explosives　would　be　most　effective　
against　the　submarines　themselves。　
MBAs；　unless　they　have　a　strong　background　in　mathematics；　are　unlikely　
to　be　able　to　apply　any　of　the　techniques　and　tools　described　below　
without　expert　help。　But　they　do　need　to　be　aware　that　such　methods　are　
on　hand　and　so　can　remend　their　application　when　the　opportunity　or　
relevant　problem　arises。　
OUTSOURCING　AND　THE　VALUE　CHAIN　
The　classic　opening　question　in　any　business　analysis　that　MBAs　will　find　
themselves　addressing　with　increasing　frequency　is：　what　business　are　we　
in？　Later　in　that　analysis　will　e　a　more　fundamental　and　challenging　
question：　what　business　should　we　be　in？　These　are　strategic　boundary　
questions　that　will　be　explored　in　more　detail　in　Chapter　12；　Strategy。　The　
answers　are　also　key　to　deciding　what　operations　a　business　should　and　
should　not　undertake　itself；　and　the　answer　will　not　always　be　the　same；　as　
business　petence　and　market　opportunities　change。　
Figure　10。1　Maternity　clothes　value　chain　
Creative　design　→　Purchase　of　materials　→　Make　up　garments　→　
Package　and　distribute　→　Retail　through　own　outlets　→　Consumers　
The　business　example　shown　in　Figure　10。1　doesn’t　have　to　do　all　the　activities；　
from　creative　design；　through　manufacture；　to　selling　out　from　its　
own　retail　outlets。　It　is　highly　likely　that　there　are　other　businesses　be。。er　
at　certain　elements　of　the　process。　For　example；　most　businesses　don’t　
retail　the　products　they　manufacture；　and　even　within　the　same　industry　
different　approaches　are　taken。　Dell　only　sells　direct　via　the