Business and Society Ch.2 – Flashcards
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- CSR means seriously considering the impact of a company's actions on society - CSR requires the individual to consider his or her acts in terms of a whole social system, and holds him or her responsible for the effects of his or her acts anywhere in that system. - These definitions provide useful insights into the concept of CSR.
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Corporate Social Responsibility (CSR) As a Concept Early definitions
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- Corporate Social Responsibility Emphasizes Obligation, Accountability - Corporate Social Responsiveness Emphasizes Action, Activity - Corporate Social Performance (CSP) Emphasizes Outcomes, Results.
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Traditional CSR Patterns Emphasize:
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- Corporate Citizenship (C) - Views companies as citizens and all this implies. - Corporate Responsibility (CR) - Broadly Focuses on all categories of corporate Responsibility. - Sustainability (SUS) - Emphasizes longer-term concern for people, planet and profits
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Newer Terms with Similar Meanings (CSR Patterns)
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Economic Legal Ethical, and Discretionary expectations that society has of organizations at a given point in time.
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Corporate Social Responsibility encompasses the
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Economic Responsibilities + Legal Responsibilities + Ethical Responsibilities + Philanthropic Responsibilities = Total Corporate CSR A stakeholder perspective focuses on the CSR pyramid as a unified whole.
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The CSR Equation
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Top 20 Activities or Characteristics ofSocially Responsible Companies
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Makes products that are safe
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1.
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Does not pollute air or water
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2.
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Obeys the law in all aspects of business.
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3.
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Promotes honest or ethical employee behavior.
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4.
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Commits to safe workplace ethics
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5.
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Does not use misleading or deceptive advertising.
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6.
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Upholds stated policy banning discrimination.
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7.
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Utilizes "environmentally friendly" packaging.
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8.
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Protects employees against sexual harassment.
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9.
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Recycles within company.
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10.
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Shows no past record of questionable activity.
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11.
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Responds quickly to customer problems.
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12.
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Maintains waste reduction program.
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13.
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Provides or pays portion of medical costs.
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14.
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Promotes energy conservation program.
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15.
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Helps displaced workers with placement.
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16.
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Gives money toward charitable or educational causes.
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17.
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Utilizes only biodegradable or recyclable materials.
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18.
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Employs friendy or courteous or responsive personnel
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19.
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Tries continually to improve quality.
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20.
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- Classical Economics - Business Not Equipped - Dilutes Business Purpose - Too Much Power Already - Global Competiveness
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Arguments against CSR
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The classical economic views is that business' only goal is the maximize profits for owners.
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Classical Economics
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Business is not equipped to handle social activities.
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Business Not Equipped
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It dilutes the primary purpose of business.
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Dilutes Business Purpose
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Businesses have too much power already.
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Too Much Power Already
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It limits the ability to compete in a global marketplace.
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Global Competiveness
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- Enlightened self-interest - Warding off government regulations - Resources Available - Proaction is better than Reaction - Public supports
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Arguments For CSR
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Business must take actions to ensure long-term viability.
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Enlightened self-interest
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This is one of the most practical reasons.
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Warding off government regulations.
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Business has the resources and expertise. Let it try.
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Resource Available
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Proaction is also less costly
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Proaction is better than Reaction
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the public strongly supports CSR
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Public supports
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Defensive approach Cost-benefit approach Strategic approach Innovation and learning approach
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Business Responses to calls for CSR Make the Business Case for CSR
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1. Innovation 2. Cost Savings 3. Brand differentiation 4. Long-term thinking 5. Customer engagement 6. Employee engagement
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The Business Case for CSR 6 Reasons for Embracing CSR
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The Business Case for CSR Business Benefits of CSR
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Win new business
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Business Benefits of CSR 1.
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Increase customer retention
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Business Benefits of CSR 2.
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Develop and enhance relationships with customers, suppliers, and networks.
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Business Benefits of CSR 3.
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Attract, retain, and maintain a happy workforce and be an Employer of Choice.
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Business Benefits of CSR 4.
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Save money on energy and operating costs and manage risk.
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Business Benefits of CSR 5.
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Differentiate itself from competitors
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Business Benefits of CSR 6.
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Improve its business reputation and standing
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Business Benefits of CSR 7.
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Provide access to investment and funding opportunities
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Business Benefits of CSR 8.
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Generate positive publicity and media opportunities due to media interest in ethical business activities.
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Business Benefits of CSR 9.
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An action-oriented variant of CSR
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Corporate Social Responsiveness
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Implies a state or condition of having assumed an obligation.
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Responsibility
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Connotes a dynamic, action-oriented conditioned.
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Responsiveness
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Social obligation, social responsibility, and social responsiveness; anticipatory, preventive
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Sethi's Three-Stage Schema
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- CSR1 is accountability-focused. - CSR2 is responsibility-focused - CSR3 refers to corporate social rectitude.
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Frederick's CSR1, CSR2, and CSR3
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Emphasizes the process of social responsiveness.
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Epstein's Process View
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Social Responsibility Social Issues (Stakeholders) Involved Philosophy (Mode) of Social Responsiveness
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Corporate Social Performance Carroll's Model
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(Top to Bottom) Discretionary (Philanthropic) Responsibilities Ethical Responsibilities Legal Responsibilities Economic Responsibilities.
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Corporate Social Performance Carroll's Model Social Responsibility
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(Left to Right) Consumerism Environment Discrimination Product Safety Occupational Safety Shareholders
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Corporate Social Performance Carroll's Model Social Issues (Stakeholders) Involved
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(Back to Front) Proaction Accommodation Defense Reaction
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Corporate Social Performance Carroll's Model Philosophy (Mode) of Social Responsiveness
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Check slide 24
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Corporate Social Performance: Wartick ; Cochran's Model Extensions
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- Embraces all the facets of CSR, Responsiveness, and Performance. - is not a new concept, but one whose time has come - serves a variety of stakeholders.
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Corporate citizenship (1 of 2)
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- A reflection of shared moral ad ethical principles. - A vehicle for integrating individuals into the communities in which they work. - A form of enlightened self-interest that balances stakeholders' claims and enhances a company's long-term value.
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Corporate citizenship (2 of 2) Broad View
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- Corporate community relations
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Corporate citizenship (2 of 2) Narrow View
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- Traditions and values - Reputation and image - Business strategy - Recruiting and retaining employees.
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Drivers of Corporate Citizenship Internal Motivators
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- Customers and consumers - Expectations in the communities - Laws and political pressures.
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Drivers of Corporate Citizenship External Pressures
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- Improved employee relations - Improved customer relationships - Improved business performance - Enhanced marketing efforts.
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Benefits of Corporate Citizenship Benefits to the business:
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(improves recruitment, retention, morale, loyalty, etc.)
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Improved employee relations
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increases customer loyalty; a tiebreaker
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Improved customer relationships
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positively impacts bottom-line returns, increases competitive advantage.
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Improved business performance
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helps create a positive company image
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Enhanced marketing efforts.
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slide 29
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Stages of Corporate Citizenship
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Stage 1: Elementary (credability) Stage 2: Engaged (Capacity) Stage 3: Innovative (Coherence) Stage 4: Integrated (Commitment) Stage 5: Transforming
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Development Challenges That Trigger Movement of Corporate Citizenship
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- be good corporate citizens in the countries in which they do business - tailor their initiatives to conform to the cultural environment
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Multinational enterprises are expected to:
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approaches will continue as the world economic stage becomes the common environment within which businesses function.
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Convergence in global CSR
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Perspective 1: Socially Responsible firms are more financially profitable. Perspective 2: A firm's financial performance drives its social performance. Perspective 3: There is an interactive Relationship Among CSP, CFP, and CR.
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The Relationship Between Social and Financial Performance
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1: refer to slide 33
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Perspective 1: Socially Responsible firms are more financially profitable.
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2: refer to slide 33
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Perspective 2: A firm's financial performance drives its social performance.
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3: refer to slide 33
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Perspective 3: There is an interactive Relationship Among CSP, CFP, and CR.
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- Impacts or benefits of social performance cannot be fully measured or appreciated by considering only the impact on the firm's bottom line. - CSP cannot be fully comprehended unless it includes impacts and measures on consumers. employees, the community and other stakeholder groups.
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The stakeholder-bottom line perspective
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slide 35
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A multiple Bottom Line Perspective
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- Economic - Social - Environmental The goal is corporate sustainability.
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The Triple Bottom Line Perspective Business Must Attend to Three Key Spheres of Sustainability
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- Emerged in 1970s - Over $3.74 trillion in socially responsible investments in the U.S.
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Socially Responsible, Sustainable, Ethical Investing Socially Responsible Investing
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A technique used to screen firms for socially-responsible investment purposes.
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Socially Responsible, Sustainable, Ethical Investing Social Screening
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- Total dollars invested in SRI has grown exponentially over past 20 years. - Council on Economic Priorities suggest 3 reasons.
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Reasons for the Upsurge in Socially Responsible Investing
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1. More reliable research on CSP 2. Investment firms using social criteria have solid track record. 3. The socially conscious 1960s generation is making investment decisions.
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Council on Economic Priorities suggest 3 reasons.:
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Globally based resource system; tracks emerging issues and trends, provides information on corporate leadership and best practices, conducts educational workshops and training, and assists organizations in developing practical business ethics tools
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Business for Social Responsibility
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to impower, beautify, and uplift were evident.
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community obligations
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Acceptance by an organisation of its responsibility to stakeholders for its actions and decisions
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corporate citizenship
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Focuses on the actual results achieved from CSR The degree to which a firm's actions honor ethical values that respect individuals, communities, and the natural environment.
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corporate social performance
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The extent to which businesses meet the legal, ethical, economic and voluntary responsibilities placed on them by their stakeholders
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corporate social responsibility
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the action- oriented variant of CSR
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corporate social responsiveness
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the goal of the triple bottom line approach. The goal of sustainability is to create long-term shareholder value by taking advantage of opportunities.
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corporate sustainability
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a company's social responsibility to make a profit by producing a valued product or service
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economic responsibilities
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a company's social responsibility not to violate accepted principles of right and wrong when conducting its business
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ethical responsibilities
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When a company puts its commitment to social and environmental responsibility into practice worldwide, not only locally or regionally it is called:
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global corporate citizenship
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To obey local, state, federal, and relevant international laws.
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legal responsibilities
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the policy or practice on the part of people in positions of authority of restricting the freedom and responsibilities of those subordinate to them in the subordinates' supposed best interest.
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paternalism
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center on the corporation's participation in activities that promote human welfare or goodwill generally through donations of time and money or products and services
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philanthropic responsibilitites
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contributions to charity ad other worthy causes
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philanthropy
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pursues innovative ways to solve pressing social problems
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social entrepreneurship
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actively & directly incorporates ethics & morality into the investment decision
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socially responsible, sustainable or ethical investing
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a five-stage model for describing the development of companies as corporate citizens, comprised of Elementary, Engaged, Innovative, Integrated, and Transforming stages
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stages of corporate citizenship
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The ability to keep in existence or maintain. A sustainable ecosystem is one that can be maintained
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sustainability
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Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
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sustainable development
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the economic, environmental and social performance of a business.
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triple bottom line
