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Corporate Social Responsibility :

Corporate Social Responsibility

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The rationale for CSR has been articulated in a number of ways. In essence it is about building sustainable businesses, which need healthy economies, markets and communities. The key drivers for CSR are; ‰ Enlightened self-interest - creating a synergy of ethics, a cohesive society and a sustainable global economy where markets, labor and communities are able to function well together. ‰ Social investment - contributing to physical infrastructure and social capital is increasingly seen as a necessary part of doing business. ‰

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Transparency and trust - business has low ratings of trust in public perception. There is increasing expectation that companies will be more open, more accountable and be prepared to report publicly on their performance in social and environmental arenas ‰ Increased public expectations of business - globally companies are expected to do more than merely provide jobs and contribute to the economy through taxes and employment.”

Social Responsibility...:

Social Responsibility... an organization’s obligation to maximize its positive impact on stakeholders and to minimize its negative impact includes legal, ethical, economic, and philanthropic (discretionary) dimensions

Legal Dimension...:

Legal Dimension... refers to obeying governmental laws and regulations civil law: rights & duties of individuals and organizations criminal law: prohibits specific actions and imposes fines and/or imprisonment as punishment for breaking the law

Ethical Dimension...:

Ethical Dimension... behaviors and activities that are expected or prohibited by organizational members, the community, and society (not codified into law) standards, norms, or expectations that reflect the concern of major stakeholders

Economic Responsibilities...:

Economic Responsibilities... how resources for the production of goods and services are distributed within the social system Do you think consumers favor socially responsible companies or are they most enamored with companies that maximize profits?

Philanthropic Dimension...:

Philanthropic Dimension... business’s contributions to society strategic philanthropy Home Depot Microsoft, Hewlett Packard, IBM Avon

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Foundation principles of corporate social responsibility

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The pros and cons of corporate social responsibility Arguments for corporate social responsibility Arguments against corporate social responsibility Balances corporate power with responsibility. Discourages government regulation. Promotes long-term profits for business. Responds to changing stakeholders’ demands. Corrects social problems caused by business. Lowers economic efficiency and profit. Imposes unequal costs among competitors. Imposes hidden costs passed on to stakeholders. Requires social skills business may lack. Places responsibility on business rather than individuals.

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The multiple responsibilities of business

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Two views of corporate social responsibility The shareholder view The only social responsibility of business is to create shareholder wealth. Corporate management cannot decide what is in the social interest. The costs of social responsibility which do not increase the value of stock, will be passed on to consumers. The multiple stakeholders view All customers and employees are treated with dignity. Relationships with suppliers must be based on mutual trust. Belief in fair economic competition. Business can contribute to social reform and honor human rights.

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A three-stage model of corporate social responsiveness STAGE Organizational Policy Learning Commitment Time (years) Degree of responsiveness to a specific issue High Low Identity problem Formulate policy Specialized learning Administrative learning Organizational changes

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