1. Changing Notions of Ethics in SMEs
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

2. Business Ethics in Czech SMEs
Dytrt Study (2011) - Survey 2500 SMEs / 18% response rate
Key problems:
not enough knowledge on benefits
management practices rooted in the past
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

3. EU / German Studies: Matching Experience
EU Project: Mittelstand (Germany/France/Poland)
same problems as in CZ / Dytrt study
training / workshops / teaching material etc. had a considerable impact on the participating SMEs
Leuphania University, Lüneburg, Germany:
study with large German companies
rising awareness in firms concerning CSR
willingness to use strategic tools and methods to implement CSR projects
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

4. Global Corruption in 2010: Percentage of People Reporting that the last bribe paid was to...
Source: Transparency International 2010 Global Corruption Barometer
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

5. Two sets of Interrelated Behaviors
Individual
Organizational
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

6. Ethical Decision Making Processes: Rational or Emotional?
Very often driven by assumptions, unconscious belief systems (Kahneman 2010, Ariely 2011)
„What-the-Hell-Effect“ (Ariely, 2012)
ROI for CSR often generic and not transparent
Innovation resistance (We have always done it like that / We have never done it like that)
Unable to deal with conflict-of-interest
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

7. Dramatic Increases in Certain Misconduct Posing Risk
TYPE OF MISCONDUCT
2009
2011
INCREASE
Sexual harassment 7%
11%
4ppts
Substance abuse
Insider trading 1% 4%
3ppts
Illegal political contributions
Stealing 9%
12%
Environmental violations
Improper contracts 3% 6%
Contract violations
Improper use of competitor’s information 2% 5%
Health or safety violations
13%
2ppts
Anti-competitive practices
Source: Ethics Resource Center, 2011 National Business Ethics Survey
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

8. Record Number of Employees Choosing to Report Observed Misconduct
Source: ECR, 2011 National Business Ethics Survey
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

9. The Impact of Business Ethics in SMEs
Paradigm shift in management practices:
Redefining / developing a distinct competitive strategy
Development of a strategic CSR/CSI agenda
Making CSR/ethics part of business strategy
Unique value proposition
Contributing to a reliable and transparent business environment in the whole economy
Accountability in business practices
Making CSR approach integral part of firm’s competitive strategy
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

10. CSR as Intangible Asset for Value Creation
Establishing and retaining long-term profitable customer relationships
Avoiding blackmail traps
Reliability and accountability in business practice enable all market participants to compete on an equal and fair basis
EU will further push efforts to impose corporate governance codes of conduct also on SMEs
Unethical - and especially illegal - behavior affects the whole economy negatively
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

11. Creating a Corporate Social Agenda
Source: M.E.Porter, M.R. Kramer, HBR, May 2009
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

12. Creating a Social Dimension to the Value Proposition: From CSR to CSI - Corporate Social Integration
Strategic CSR unlocks shared value by investing in social aspects of context that strengthen company competitiveness.
At the heart of any strategy is a unique value proposition: a set of needs a company can meet for its chosen customers that others cannot.
Strategy is always about making choices, and success in corporate social responsibility is no different. It is about choosing which social issues to focus on.
(Porter and Kramer, 2009)
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

13. Balanced Scorecards as a Powerful Planning Tool in SMEs
Align the organization and the individual and organizational behavior in the firm with its strategic goals
Developing explicit competitive strategies also in SMEs
Make planning a conscious process linked to business performance
Create transparency for relevant stakeholders, especially employees, customers and partners
R.S. Kaplan, D.S. Norton, How to Implement a New Strategy without Disrupting your Organization, May 2009
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

14. The Importance and Impact of Key Performance Indicators
Conscious accountable planning process
Setting clear goals and objectives
Creation of unique value proposition
Improved market positioning
Development of a distinct competitive strategy
Controlled strategy implementation
Creation of a value system which is in accordance with the overall performance goals
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

15. Source: Kaplan, Norton, Strategy Maps, 2004
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

16. Put Strategy Maps in Perspective
Porter on Strategy:
Kaplan, Norton on Strategy Maps:
A unique combination of activities that deliver a different value proposition than competitors or the same value proposition better
Framework that allows companies to identify and link together the critical internal processes and human, information, and organization capital that deliver the value proposition differently or better
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University

17. Conclusion
A reliable and accountable business environment is important to ensure equal opportunities for all market participants
A distinct corporate and business strategy helps SMEs to develop sustainable competitive advantage and longterm business success
CSR/CSI in Czech SMEs makes a difference also in the positioning of companies in the EU and the overall value proposition
Ethical organizational behavior helps finding the right talents
Strategy Maps, Balanced Scorecards and the definition of Key Performance Indicators help SMEs to implement their competitive strategies BUT:
It takes a paradigm shift for business owners, business leaders and managers!
Irena Jindrichovska, University of Economics and Management
Gabriele Meissner, Anglo-American University