LEGO

Published on Aug 18, 2016

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PRESENTATION OUTLINE

Lego

Yume Ahlaam Nagase  [00133055]

Lego Group overview

  • The LEGO Group is a privately held company based in Billund, Denmark.
  • It is a well-reputed company and renowned for its classic LEGO brick which is the foundation for all of the company's products.
  • Founded in 1932 by carpenter Ole Kirk Christiansen.
  • The company's name “LEGO” was established in 1934 and is formed by the first two letters of the Danish words LEG GODT, which means “play well”.

Lego group overview

  • The LEGO Group is a large multinational company and corporation (MNC) in terms of revenue and employees.
  • A multinational corporation has facilities and other assets in at least one country other than its home country.
  • With sales in 130 countries and approximately 17,294 employees worldwide, the LEGO Group is the world's fifth-largest manufacturer of toys. (The LEGO Group Annual Report 2015)

Mission:

  • ‘Inspire and develop the builders of tomorrow’
  • The company's ultimate purpose is to inspire and develop children to think creatively, reason systematically and release their potential to shape their own future - experiencing the endless human possibility.
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vision:

  • ‘Inventing the future of play’.
  • The company attempts to pioneer new ways of playing, play materials and the business models of play - leveraging globalisation and digitalisation...it is not just about products, it is about realising the human possibility.
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Lego: A Sustainability Strategy




The four promises as described in the LEGO® Brand Framework:
-Play Promises
-Partner Promise
-Planet Promise
-People Promise



Link to Video: https://www.youtube.com/watch?v=5d4DsK08f-4

The core values at LEGO

  • Very high quality products.
  • Cautious, slow, steady growth.
  • Focus on narrow, interchangeable product set.
  • Informed innovation, not unconstrained creativity.
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The LEGO Group Culture – LEGO People Promise

  • The role of the LEGO People Promise is to enable execution of the business strategy and build the long-term health of the company. It defines why people should choose and commit the best they can to the company.
  • In regards to the core of the People Promise, there are four pillars that determine the LEGO employees...
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The four pillars defining the LEGO employees:

  • Purpose Driven Experience the pride, commitment and shared sense of responsibility to deliver our mission.
  • Systematic Creativity Combine your experience and imagination to find the best solutions – now and in the future.
  • Clutch Power Feel part of a family and collaborate across the global LEGO community.
  • Action Ability Be accountable, deliver what you promise and unlock your talent in the best interest of the company.
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A Strong and Creative Corporate Culture

  • The LEGO Group was built on the Danish values of hard work, humility and teamwork and its heritage remains a fundamental part of the LEGO corporate culture.
  • Jørgen Vig Knudstorp believes that a strong company culture means not having to look into a manual or having a rule book but having an intuitive sense on how to do things; a problem does not have one solution to the same problem but having many solutions to the same problem.
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“Everything in the world starts small and then becomes bigger—except bad things. They start big, and then get smaller.”
– Warren St. John

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  • "" It is at the very heart of our company to always strive to do better. We aspire to give children the best play experiences, to be the best partner to work with, to be the best workplace for our employees, and to be the best company for society. '' — Kjeld Kirk Kristiansen, third-generation owner of the LEGO Group
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the ethical business strategies

  • Conducting business in a responsible and ethical manner is at the core of the LEGO Group culture and has been ever since the company was established 84 years ago.
  • The company focuses on the ethical business strategies to live up to stakeholders’ expectations and not least its own expectation of being a leading responsible business.
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Responsible supplier management

  • The organisation focuses on working systematically with its suppliers to support decent and fair working conditions in the entire supply chain.
  • The organisation requires that its suppliers and business partners sign the Code of Conduct, which covers important matters related to:
  • human rights,
  • labour rights,
  • health and safety,
  • anti-corruption and the work environments of all employees.
Photo by kennymatic

Ethical business conduct

  • The framework consists of policies that are global in nature and set the overall direction and guidance on important areas related to:
  • health and safety,
  • human rights,
  • people and culture,
  • anti-corruption and gifts,
  • hospitality and entertainment (includes guidelines on financial thresholds) and political contributions (these are prohibited by the LEGO Group).

Photo by masondan

Responsible supplier management

  • The organisaiton regularly monitors compliance to the Code of Conduct through dialogue and its audit programme, and also uses third party auditors and a stringent follow-up system.
  • The organisation works with its suppliers on building their understanding and means to meet the requirements in the Code of Conduct and improve their performance through training and capacity building.

Safe, high-quality play experiences for childreneN

  • In 2015, the LEGO Group achieved its goal: providing the safest play experience for children, by having zero product recalls. (The LEGO Group responsibility report 2015)

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Environmental leadership

  • With the opening of the Borkum Riffgrund 1 wind farm in Norden-Norddiech, Germany, the organisation is significantly closer to the goal of balancing its global energy consumption with renewable energy capacity by 2020.
  • The company intends to achieve the goal by focusing on improving its energy efficiency and by investing in renewable energy.
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Environmental leadership

  • The organisation installed new, more modern and effective moulding machines that are also significantly more energy efficient.
  • In 2015, the company made substantial progress with a 5% improvement in its energy efficiency.
  • With this accomplishment, the organisation has made a 14% improvement in just three years.
  • The organisation will continue to strive for a 2.5% energy efficiency improvement annually.
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The California Transparency in Supply Chains Act

  • The California Transparency in Supply Chains Act of 2010 requires manufacturers and retailers doing business in the State of California.
  • The objective of the act is to disclose information regarding their efforts to eradicate slavery and human trafficking from their direct supply chains.
  • At The LEGO Group, with its compliance to the California Transparency in Supply Chains Act, the company does its utmost to prevent adverse human rights impacts (i.e. human trafficking and slavery in its supply chain).
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Opportunities for all

  • The organisation approaches gender diversity as the first important milestone for creating a healthy organisation.
  • The organisation’s aim is to progress towards its long-term ambition of having a more gender balanced flow of talents contributing to a stronger global organisation.
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RESPECTFUL WORKPLACES

  • In 2013, the organisation launched its Responsibility and Human Rights policy, which reflects its commitment to children, employees and workers in its supply chain and in local communities.
  • The organisation particularly focus on mitigating adverse human rights impacts and capitalising on the positive ones.
  • Among other things, the organisation is strongly committed to ensuring that all the employees are treated with equal respect and dignity.
Photo by Josh Kenzer

corporate CULTURE

  • The LEGO Group's corporate culture is based on openness, trust, and company’s core values: Creativity, Imagination, Fun, Learning, Quality and Care, which are reflected in everything the company does.
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ethical and transparent business conduct

  • The organisation works purposefully to uphold its long-standing values and to promote high standards at all times through transparent and ethical business practices.
  • The organisation works with its suppliers to support fair and decent working conditions in the entire supply chain.
Photo by kennymatic

The safest working conditions

  • The organisation has set an ambition to remain among the top ten best performing corporations in terms of safety.
  • To live up to this ambition, all employees attend its behaviour-based safety programme, which is just one among several initiatives.
  • Strengthening its safety governance is an ongoing process which is governed by the global health and safety community.
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Engaging with local communities

  • The LEGO Group works together with the LEGO Foundation to build, maintain and support local communities where it is present.
  • It is estimated that in 2015 more than 3,000 LEGO employees were involved in local community activities that engaged more than 66,000 children.
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Engaging withlocal communities

  • In 2015, activities were carried out at 16 LEGO locations around the world; Austria, the Benelux, Canada, China, Czech Repub- lic, Denmark, France, Germany, Hungary, Italy, Mexico, Poland, Russia, Singapore, United Kingdom and USA.

Pioneer responsible business conduct towards children:

  • To respect and support children’s rights and ensure a positive impact on children, the company implements and promotes the 10 Children’s Rights and Business Principles.
  • In 2015, this work, framed within its partnership with UNICEF, generated awareness of the principles at relevant external business platforms.
  • It further strengthened its internal child protection governance supported by UNICEF.
Photo by Nanagyei

STAKEHOLDER VIEW

  • In order to profit and survive, which is still considered the primary goal and responsibility of a company (European Commission 2001), businesses need to identify and act in accordance with the demands and expectations of its stakeholders (consumers, employees, investors, governments, suppliers, local community members, NGOs, etc.) (Neergaard 2006).
  • In this respect, the responsibilities of a company are defined by its stakeholders.
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THE NATIONAL CONTEXTS FOR CSR—CSR IN DENMARK

  • In relation to the former CSR area, the current Danish government particularly focuses on employees and working conditions, and CSR in the supply chain (Danish Commerce and Companies Agency 2010).
  • Reduction of energy consumption and green house gas emissions are central elements of the government's CSR agenda (The Danish Government 2008).

STAKEHOLDER APPROACH

  • Following the national context as well as the general theoretical perception of CSR, the organisation applies the stakeholder approach to CSR and base its CSR activities on stakeholder interests and concerns.
  • The stakeholder approach is significantly effective in helping to achieve the overall objectives of the Lego Group.
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Effects of ethical branding and corporate reputation

  • LEGO Group’s strategic ethical branding contributed to higher reputation.
  • Corporate reputation also played a significant role in organisation’s success over the past few years.
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Effects of ethical branding and corporate reputation

  • The Reputation Institute RepTrak® 100 survey conducted in March 2016 ranks the LEGO Group as the sixth most reputable company globally.
  • The Reputation Institute RepTrak® acknowledges that Lego Group made a positive impact through the way it operates – from its focus on business ethics to reducing the impact on the environment.
  • The position among the most highly regarded companies is an acknowledgement of the LEGO Group’s ability to create a strong bond with children and parents globally.

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Key 2015 results

  • Injury rate per million work hours was 1.4 compared to 1.7 in 2014.
  • More than 90% of waste from production sites recycled.
  • The number of employees in the LEGO Group increased from 14,762 at the end of 2014 to 17,294 at the end of 2015.
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Key 2015 results

  • Revenue growth excluding foreign exchange impacts was 19% year over year on a local currency basis.
  • Revenue increased by 25% in DKK to DKK 35.8 billion against DKK 28.6 billion in 2014.
  • The year's operating profit increased to DKK 12.2 billion against DKK 9.7 billion in 2014 – an increase of 26%.
  • Net profit was DKK 9.2 billion compared to DKK 7.0 billion in 2014 – an increase of 31%. –Overall, the LEGO Group delivered a year of exceptional growth in 2015.
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transparency and accountability of the organisation

  • The LEGO Group takes responsibility for conducting its business in a way that is transparent and accountable.
  • The organisation has implemented the TBL reporting and concept to be able to :
  • take more efficient and sustainable method to manage business risks,
  • handle the concerns of society and
  • identify new business opportunities, as well as possible obstacles.
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TBL Reporting

  • TBL focuses on three aspects namely economic, ecological and social.
  • TBL notion requires the responsibility of stakeholders rather than shareholders in order to increase the organisation’s value.
  • This also consists of its profitability, shareholder values and its social, human and environmental capital (Savitz & Weber 2006).
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Figure 1: Triple Bottom line (Source: Sustainability Assessment and Reporting for the University of Michigan's, 2002, p.8).

The impact that foreign social norms and standards have on international business...

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Responsibility

  • The LEGO group intends to have a positive impact on our stakeholders, society and the planet that children will inherit.
  • The company attempts to take the leading developing better standards for business conduct and better ways of working.

Business ethics and standards

  • As a global company, the company faces global issues and challenges when conducting business in a number of countries where business ethics and standards vary.
  • It is therefore important that we adhere to the same high standards and regulations across the entire organisation and in all markets.
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THe business conduct

  • The business conduct builds on integrity and respect for areas of responsibility that form the very basis of the LEGO Group Supplier Code of Conduct.
  • With this Code of conduct, the company attempts to engage its stakeholders to always conduct business in a responsible and ethical manner.
THE LEGO GROUP CODE OF BUSINESS CONDUCT
In addition to the corporate policy framework, the organisation has its Code of Business Conduct.

The LEGO Group Code of Business Conduct handbook assists in ethical dilemmas and serves as a guide in making the right decisions when working in most countries of the world.

To ensure the necessary awareness of the business conduct and anti-corruption principles, all salaried LEGO employees including directors are required to complete its e-learning training courses on business conduct and anti-corruption every second year.
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foreign social norms and standards

  • The Supplier Code of Conduct has existed since 1997 and, in 2003 .
  • The LEGO Group was the first in its industry to sign the Unit- ed Nations Global Compact (UNGC).
  • The company therefore commits to embracing the UNGC’s ten principles regarding human rights, labour standards, the environment and anti-corruption.

Working Hours

  • Following international labour standards and safeguarding the health and safety of the employees, the LEGO Group requires that the maximum allowable working hours in a week must not, on a regular basis, exceed 48 hours with a maximum of 60 effective hours per week, or less if dictated by national law, including overtime and excluding lunch and other breaks.

Working Hours

  • Overtime hours must be voluntary unless they are planned or agreed on in accordance with applicable national laws or collective bargaining agreements.
  • Overtime must not be demanded on a regular basis and must be planned in a manner that ensures safe working conditions.
  • Overtime must be compensated at a premium rate of no less than 1.25 times the normal amount of compensation per hour or more if dictated by national law.

WOrking hours

  • Alternatively, employees may be offered time off in lieu according to national law.
  • Employees must have no less than 24 consecutive hours of rest in every seven-day period, or more if dictated by national law.

The company sets a maximum of a 60 hour work week for all of the employees, applicable likewise for employees of suppliers.

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engage with a broad range of international and valuable stakeholders

  • The organisation support children’s rights with UNICEF.
  • It embed and pioneer the Ten Principles as an active member of the United Nations Global Compact.
  • The organisation also improves energy efficiency as a part of its partnership with the World Wildlife Fund.
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Child Labour & Young Workers

  • The LEGO Group strongly dissociates itself from child labour.
  • LEGO suppliers and subsuppliers must not engage in or benefit from child labour.
  • Employees under the age of 18 must not be involved in hazardous work or night work.
  • The minimum age for light work must be no less than 13 years (12 years where established by national laws in accordance with the ILO developing country exception).
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Child Labour & Young Workers

  • The minimum age for full-time employment shall not be less than the corresponding age in which completion of compulsory schooling takes place and, in any case, not be less than 15 years (14 years where established by local law in accordance with the ILO developing country exception).
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Child Labour & Young Workers

  • If the child is under the national minimum age for light work, a redundancy payment must be provided by the supplier to the child or its family in combination with education.
  • The LEGO Group will assist the supplier in implementing a socially responsible corrective action plan and reserves the right to involve local or international organisations in ensuring a correct and appropriate remediation process.

Child Labour & Young Workers

  • In all types of work, the supplier must establish types of work, work schedules and labour intensity with special consideration to young workers under the age of 18.
  • The LEGO Group generally encourages the creation of apprenticeship programmes in compliance with national laws and regulations.

The company does not engage in or accept any kind of child labour in its supply chain.

Forced Labour & Freedomof Movement

  • The LEGO Group strongly dissociates itself from forced, bonded and compulsory labour, including modern forms of slavery such as trafficking.
  • Suppliers and sub-suppliers must therefore not engage in or benefit from such types of labour.
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Forced Labour & Freedomof Movement

  • Forced, bonded or compulsory labour is defined as forcing people to work against their will or under pressure from a threat or punishment.
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Forced Labour & Freedomof Movement

  • Employees must have freedom of movement at their workplace as appropriate to their function.
  • Guards must only be posted for normal security reasons to protect employees and company property.
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Corruption & Bribery

  • The supplier must ensure by training and management systems appropriate to the size of the company that bribes are not offered, promised, given, accepted, condoned, knowingly benefitted from or demanded.
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The company dissociates from any form of corruption and bribery.

Lego’s major sustainability related challenges

  • Managing and navigating diverse stakeholders.
  • Unlocking value from sustainable technology.
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lifecycle assessment of the product

  • Identify and understand risks —Reputation, regulation, resources
  • Opportunities for improvement —Cost reductions, supply chain partnerships, competitive advantage
  • Redesign processes and products —New materials
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The potential legal responsibilities and issues of ethical compliance for this organisation...

“We respect the law at all times and so must our suppliers and partners”. — Jørgen Vig Knudstorp President and CEO of the LEGO Group

Legal Compliance

  • Suppliers must comply with all national laws, regulations and industry standards in force whilst applying the most stringent levels of diligence at all times.
  • In case of conflict between national law and the LEGO Group Supplier Code of Conduct, suppliers should immediately consult with the LEGO Group.
Photo by Rob Young

Legal Compliance

  • The LEGO Group, as primarily a Danish and secondly a European country, naturally followed the European and international approach to CSR in which adherence to international legislation and standards are perceived critical.
  • In exceptional circumstances, where national law is not enforced by the State and where this situation is widely recognised by stakeholders, the LEGO Group will implement international standards while working progressively towards meeting national requirements.
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How the organisation’s strategies could be improved?

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''We want to minimise our impact on the environment where it is negative and use
sustainable materials in all our core LEGO products and packaging''.

—Jørgen Vig Knudstorp, President and Chief Executive Officer of the LEGO Group

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Environmental issues

  • Since 1963, Lego blocks have been made from a strong, resilient plastic known as acrylonitrile butadiene styrene (ABS).
  • A very tough plastic called ABS, or acrylonitrile-butadiene-styrene, three polymers derived from petroleum.
  • ABS is not environmentally friendly plastic.
  • It is not biodegradable and also not a renewable resource.
  • Made out of oil, and thus damaging to the environment.
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Environmental issues

  • Despite the company’s earliest efforts to phase out ABS bricks by 2030, the majority of Lego’s output is still in ABS—it’s the most common material used to build more than 60 billion bricks every year.

how the organisation’s strategies could be improved?

  • It is critical for the LEGO company to find an eco-friendly replacement for ABS and other ingredients in the company’s toys.
  • Collaborating to find alternatives is critical. — It is recommended that the Group collaborates with existing as well as new partners with expertise in the field, which encompass outside companies, chemical engineers, and materials experts to find and implement new replacement materials .
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Organisations set the precedent for effective business ethics in this environmental sustainability field — Eco-Friendly Child Toy Brands

Photo by .solo

Tegu

  • Tegu: This business has made it their mission to address unemployment and neglected natural and human resources in Honduras .
  • They use natural and non-toxic materials to create wooden block sets.
  • Their wood blocks contain magnets that are safely enclosed inside the wood..
  • Their coatings are water based and non-toxic.
Photo by The Marmot

haba

  • Haba: Their wooden toys are painted with solvent-free, environmentally friendly, and water-based stain.
  • Their paints are all lead and formaldehyde free.
  • Their fabric toys are made from organic materials with polyester stuffing (all of their materials are Oeko Tex 100 Certified).
  • Their toys are fully washable and have the softest and cutest colours.
  • Every product is bright and colorful, which is great for every child’s growing mind.
Photo by 7xu

green toys

  • Green Toys: All of their products are made from recycled milk containers.
  • The plastic is made from a high-density polyethylene (HDPE), which is considered to be one of the safest and cleanest plastics around.
  • Green Toys makes very durable products that are able to withstand a child smashing them around.
  • Their toys are long-lasting, open-ended (have multiple ways to use them), and remarkably easy to clean.
Photo by @Doug88888

B. Toys

  • B. Toys: Aside from their fully recycled packaging and their use of non-traditional children’s colours, B. Toys represent creativity and innovation.
  • Every one of their toys is free of BPA.
  • B. Toys do not use phthalates in the manufacturing of any of their toys.
  • Summer Lovin’ (B. toys):
Photo by andyarthur

Plan Toys

  • Plan Toys: This company is renowend for their wooden toys.
  • They are often recognized for being a GREEN company who use green materials and green manufacturing.
  • Each toy is made free of formaldehyde and heavy metals, and instead use water based paint and lots and lots of wood.
  • Plan Toys makes it their mission to create products that are great for everyone, age 0 to 100.
  • PlanToys - Sustainable Play HD:
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North Star Toys:

  • North Star Toys: All of their toys are assembled in New Mexico, in a company that runs on 100% renewable energy.
  • North Star Toys are made from sustainably harvested woods or wood scraps from local cabinetmakers.
  • All of their toys are finished with food-grade oil and their paints are non-toxic water based paint (certified lead free).
  • Their toys are not only beautiful, but they are 100% functional to withstand years and years of play.
Photo by WhoIsDhillon

Artterro

  • Artterro: This company brings out the creative side in children.
  • The company's goal is to make it easy and affordable for children to create art pieces with their family and friends.
  • Each eco art kit is a collection of natural materials and project ideas.
  • Their kits are assembled at a Goodwill facility in Wisconsin, and their packaging is made of recycled materials that can be upcycled into a frame for child’s finished artwork.
  • The kits are stocked with items such as: hand-made paper, wool felt, glass and wooden beads, copper wire, batiked fabrics, and cotton.

Wish Bone

  • Wish Bone: This eco-friendly company strives to create sustainable wooden bikes for kids.
  • Wishbone Design Studio creates wooden bikes that reduce manufacturing material consumption therein helping the environment in a positive, sustainable way.
Photo by aballant38

Thank you for your attention.

References

  • Artterro LLC. 2016. [Online] Available at: http://artterro.com/sustainability [Accessed 11 August 2016]
  • Banerjee S. B. & Ebooks Corporation, 2007 Corporate Social Responsibility: The Good, the Bad and the Ugly, Edward Elgar, Cheltenham
  • Beauchamp T. & Bowie N.E & Arnold, D. G. 2008, Ethical Theory and Business, 8th ed, Pearson/Prentice Hall, Upper Saddle River, N.J
  • B. Toys. 2016. [Online] Available at: http://www.mybtoys.com [Accessed 11 August 2016]

references

  • Crane A. & Matten D. 2010, Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization, 3rd ed, Oxford University Press, Oxford ; New York
  • New York DesJardins J. R. & McCall J. J., 2005, Contemporary Issues in Business Ethics, 5th ed, Thomson/Wadsworth, Belmont, California

references

  • Fagerstrom, P., 2016, Analyzing sustainability reporting by best performing companies in global sustainability indices: Describing the contents and appearance of the reports, University of Helsinki, Gustaf Hällströmin katu 2, Finland.
  • FastCompany. 2015. A History of Lego's Toy Industry Dominance in 3 Minutes. [Youtube] Available at: https://www.youtube.com/watch?v=Q9sORKPp_bE [Accessed 5 August 2016]

references

  • Ferrell, O. C & Fraedrich, J. & Ferrell L. 2014, Business Ethics: Ethical Decision Making and Cases, 10th ed, South-Western/Cengage Learning, Mason, OH
  • Green Toys. 2016. [Online] Available at: http://www.greentoys.com [Accessed 11 August 2016]
  • HABA. 2013. [Online] Available at: http://habatoys.com.au [Accessed 11 August 2016]

references

references

  • John Ashcroft and Company. 2014. The LEGO Case Study.[Online] Available at: http://www.thelegocasestudy.com/uploads/1/9/9/5/19956653/lego_case_study_20... [Accessed 5 August 2016]
  • Larsen, L., 2010. Corporate Social Responsibility in Denmark and the US: A comparative analysis of the CSR communication on the corporate websites of the LEGO Group and Mattel, Inc., Aarhus University., Aarhus, Denmark.

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