MANAGING AN ETHICAL PORTFOLIO

Utilising a holistic approach to portfolio analysis, brought into play by the European Foundation for Quality Management Excellence Model, the Ethical Business Portfolio matrix draws on earlier developmental work on the green business portfolio matrix (Illinitch and Schaltegger, 1995). As with the growth in environmental awareness, there has been a similar growth in the ethical approach to business – taking into account corporate responsibility. Therefore firms can no longer ignore the social and ethical impact of their operations. Taking the framework developed by Illinitch and Schaltegger, it is clear that the term 'green' can apply to more than environmental issues. The term 'green' is better renamed 'ethical' and 'dirty' renamed as 'unethical' due to the additional factors involved in the adaptation. The segments within the model are: Ethical Question Mark, Unethical Question Mark, Ethical Star, Unethical Star, Ethical Cash Cow, Unethical Cash Cow, Ethical Dog and Unethical Dog, taking the earlier Illinitch and Schaltenegger work onto a wider scale. Strategically, the organisation has to decide its ethical position. An unethical stance is an acceptable strategic option yet it will attract negative publicity which must be managed carefully. Ethical organisations have an opportunity to use consumers' goodwill to build brand reputations - organisations such as the Body Shop and Ben & Jerry's have taken just such a stance. The paper identifies a range of organisations and maps either current portfolio on an ethical stance in additional to traditional approaches. Do they now stand up ethically? Is there an imbalance in their portfolio? How is this portfolio managed? These questions are raised and answers presented within the paper.