Management Report

performance of any operations. The first point to make is that there are relatively extreme
positions on both financial and ethical performance. On the side of those who believe that
CSR is essentially a distraction for business, the most famous quote comes from Milton
Freeman, the famous economist, who said:
‘The business of business is business. A society that puts equality before freedom will get
neither. A society that puts freedom before equality will get a high degree of both.’
In the opposite corner, representing those who believe that business should only exist in the
context of a broader set of social responsibilities, is the founder of Body Shop – Anita Roddick.
She said:
‘In terms of power and influence . . . there is no more powerful institution in society than
business . . . The business of business should not be about money, it should be about responsibility.
It should be about public good, not private greed.’
In between these two positions, most businesses try and reach some degree of compromise.
In this sense they are ‘repositioning’ themselves on an efficient frontier as in Figure 21.5(a).
As pointed out in Chapter 3, repositioning an operation on the efficient frontier is sometimes
necessary as the demands of the market (or environment) change. Also, as we pointed out in
Chapter 3, it is possible either to adopt an extreme position at either end of the efficient frontier
(that is, designing a focused operation) or to try and break through the efficient frontier through
operations improvement activities. In this case, it is increasingly difficult to focus exclusively
on either financial or ethical performance. Societal pressure and issues of reputational risk are
defining minimum ethical standards while tough market conditions and stockholder expectations
are defining minimum financial standards. Thus exercising improvement creativity to
try and become better at financial and ethical performance simultaneously could be argued...