Sustainability and Competitive Advantage

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Sustainability and Competitive Advantage

• Does ethical leadership provide a competitive
  advantage?

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Start off with Debate

• Are sub-prime mortgages ethical?
• Are sub prime mortgages a sustainable business
  model?

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Problem

• Businesses need to develop a business model.
  Within that general framework an overarching
  concern
• Make quick profits/low prices?
• Build a reliable customer base/quality?

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• Provide a companyquick profits (Use cases or own
  experience).
• Provide a companyreliable customer base.
• What is the difference?
• Which ones are more common?
• Is there a hybrid? If so, provide an example.

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Focus on those differences next

• Purpose Not to give right or wrong answers.
  Different business models. My recent experience
  with car warranties.
• They are making money.
• Important as an employee, customer, manager.
• Purpose Ethical dilemmas. Choices to put
  yourself into them or avoid them.
• LargerDo companies that strive to be ethical
  flourish?

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Begin by examining competitive advantage and
sustainability.

• Competitive advantage.
• Provides something other than pricing to gain a
  market place advantage.
• So, Examples. Patents, technology,
  employees/culture, brand image, flexibility (just
  in time).

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Three components

• Value added. Reduce production costs, or offer
  premium pricing with improved quality, repeat
  customer.
• Distinctiveothers do not have easy access to it.
  
• Difficult to imitate

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Competitive advantage

• 3 M
• Wal Mart
• Microsoft
• Southwest Airlines
• Does ISU have a competitive advantage?
• Look at the components of each.

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Sustainability

• Overused word. Hard to pin down a good
  definition.
• Sustainable development
• Sustainable communities
• Sustainable environment
• Sustainable production
• Sustainable competitive advantage

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What aspects do these share?

• Sustainable includes what?

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What is the size of the system?

• One firm?
• One industry?
• One community
• One country?
• One Eco-system?
• How broad do most firms consider their system?

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Sustainable competitive advantage

• How can ethics lead to sustainable competitive
  advantage?
• How does ethical behavior by top management and
  other employees add value
• Is it distinctive?
• Is it difficult to imitate?
• WWW.patognia.com
• Ben and Jerrys
• http//www.benjerry.com/

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What does Target do that is unusual and related
to ethics?
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Henry Ford and 10/hour for workers.
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Heart of the debate

• What is the purpose of business?
• To be a good community citizen that provides a
  product or service? Do positive things.
• To be a fair price provider of a product or
  service. Dont break laws.

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• Using ethics as a part of the business model is
  an example of sustainable business practice.
• Think of it is a wonderful life
• How does ethical behavior contribute to a
  sustainable competitive advantage. Many
  different ways.

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Why do so few firms claim ethics as sustainable
competitive advantage?

• Ben and Jerrys
• Patagonia.
• Can you think of others?
• It is a matter of degree.
• Is Business Ethics an Oxymoron.

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What use does this have?

• 1. Job choice. Some of you care dont care
  about this. But why is it in your self interest
  to work in an organization that emphasizes
  ethical treatment of customers, employees.
• How do you discern? What are you told about the
  company. Are they honest to you?

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• You have to live with yourself. Are you going to
  be more content with yourself wealthy but had to
  do some unfortunate things to get there (Boiler
  Room).
• What are you willing or not willing to do to get
  there?
• Willing to trade a positive work climate and make
  some good money too.

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• 2 Unit leader. Your thoughts and actions
  influence work unit.
• What business model would you like to follow for
  your unit? You have discretion at some point.

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As a consumer

• Consider sustainable business. Do you pay more
  for some products like Ben and Jerrys.
• Do you do business with questionable business
  people.
• Utilize the BBB.