Key Skills Session 3
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Questions and Answers

What are the main categories used to identify stakeholders?

  • Relationships, expectations, and level of influence (correct)
  • Profit maximization strategies
  • Market segmentation and competition
  • Cost-benefit and resource allocation
  • Which motivation focuses on addressing social and environmental challenges as the primary goal?

  • Profit-centric motivation
  • Relational motivation
  • Instrumental motivation
  • Moral motivation (correct)
  • What is instrumental motivation primarily concerned with?

  • Developing stakeholder relationships
  • Long-term sustainability of the firm
  • Moral obligations to society
  • Economic growth and profits (correct)
  • How can the ideal level of CSR be determined according to the stakeholder approach?

    <p>Using cost-benefit analysis to match increased revenue with higher costs (C)</p> Signup and view all the answers

    In the context of stakeholder theory, what does the concept of 'legitimacy' refer to?

    <p>The moral right of stakeholders to have their interests considered (A)</p> Signup and view all the answers

    What challenge is commonly faced by businesses when balancing stakeholder and shareholder interests?

    <p>Navigating conflicts of interest between different stakeholder groups (D)</p> Signup and view all the answers

    Why might businesses engage in corporate social responsibility (CSR)?

    <p>To pursue multiple motivations such as moral, relational, and instrumental factors (D)</p> Signup and view all the answers

    What role do stakeholders play in the framework of corporate governance?

    <p>They influence corporate strategies based on their power and legitimacy (A)</p> Signup and view all the answers

    What is one approach that Air France - KLM employs to manage negative impacts on society and the environment?

    <p>Developing carbon capture projects (A)</p> Signup and view all the answers

    Which of the following best represents a criticism related to shareholder value in the context of sustainability?

    <p>Prioritizing short-term profits over long-term sustainability (C)</p> Signup and view all the answers

    How does horizontal decentralization benefit corporate social responsibility initiatives?

    <p>It allows for faster decision-making across teams (A)</p> Signup and view all the answers

    What role do autonomous teams play in promoting corporate social responsibility?

    <p>They foster creativity and local decision-making (C)</p> Signup and view all the answers

    Which of the following practices can enhance stakeholder governance in a business focused on sustainability?

    <p>Regularly engaging stakeholders in decision-making processes (C)</p> Signup and view all the answers

    Which stakeholders are primarily concerned with Corporate Social Responsibility (CSR)?

    <p>Shareholders and consumers (C)</p> Signup and view all the answers

    What is a possible negative impact of prioritizing cost reduction over environmental management?

    <p>Financial penalties and new regulations (C)</p> Signup and view all the answers

    In evaluating CSR, managers should treat these decisions similarly to what type of decisions?

    <p>Investment decisions (B)</p> Signup and view all the answers

    What factor may prevent an increase in demand when firms implement CSR?

    <p>Low ability to differentiate products or services (B)</p> Signup and view all the answers

    What can firms potentially gain from successfully implementing CSR?

    <p>Enhanced reputation and stakeholder trust (D)</p> Signup and view all the answers

    What might be considered a reputational risk for firms that neglect CSR?

    <p>Loss of consumer trust (C)</p> Signup and view all the answers

    What is a potential benefit of aligning CSR with corporate strategy?

    <p>Improved resource productivity (C)</p> Signup and view all the answers

    Which of the following is a common risk associated with non-compliance in CSR?

    <p>Financial penalties (C)</p> Signup and view all the answers

    What is one concern managers must evaluate regarding the implementation of CSR?

    <p>Resource costs associated with CSR promotion (A)</p> Signup and view all the answers

    How can CSR initiatives potentially affect relationship with consumers?

    <p>They can improve customer retention (C)</p> Signup and view all the answers

    What is the primary focus of Corporate Social Responsibility (CSR) as defined by the ISO 26000 standard?

    <p>Enhancing organizational transparency and ethical behavior (D)</p> Signup and view all the answers

    According to Freeman's definition, who qualifies as a stakeholder?

    <p>Any individual or group that can affect or is affected by the firm’s objectives (D)</p> Signup and view all the answers

    Which statement best describes the stakeholder approach to governance?

    <p>It categorizes stakeholders based on their contribution to value creation. (C)</p> Signup and view all the answers

    What does the term 'horizontal decentralization' imply in an organizational context?

    <p>Power and decision-making are distributed across various teams. (B)</p> Signup and view all the answers

    In the context of CSR, which of the following is NOT an aspect considered by organizations?

    <p>Ignoring stakeholder expectations (C)</p> Signup and view all the answers

    What is the significance of identifying primary and secondary stakeholders?

    <p>It leads to an improved understanding of community impact and stakeholder relationships. (B)</p> Signup and view all the answers

    What common misconception exists regarding CSR compliance with laws?

    <p>Legal compliance is optional in CSR implementation. (D)</p> Signup and view all the answers

    Which statement is true about the stakeholder theory developed by Rhenman?

    <p>It emphasizes the dependence between organizations and various groups for their survival. (A)</p> Signup and view all the answers

    What crucial aspect does Corporate Social Responsibility include regarding stakeholder expectations?

    <p>Understanding and addressing the needs and expectations of stakeholders (A)</p> Signup and view all the answers

    Why is stakeholder engagement important for sustainable development?

    <p>It helps organizations align their goals with the societal and environmental needs. (A)</p> Signup and view all the answers

    What is the main concern regarding the marketing strategy of allocating additional euros to social causes?

    <p>It risks being seen as exploitative. (D)</p> Signup and view all the answers

    How can product-sharing initiatives gain credibility?

    <p>By aligning with the core business and committing long-term. (B)</p> Signup and view all the answers

    Which definition best explains Corporate Social Responsibility (CSR)?

    <p>The alignment of business practices with societal values. (C)</p> Signup and view all the answers

    How does American CSR differ from European CSR according to Matten and Moon?

    <p>American CSR places more emphasis on corporate philanthropy. (A)</p> Signup and view all the answers

    What aspect was present in Bowen's definition of CSR from 1953?

    <p>There is a need for correspondence between business activities and societal values. (D)</p> Signup and view all the answers

    What is a potential effect of having a well-defined CSR practice?

    <p>Higher alignment with corporate governance principles. (D)</p> Signup and view all the answers

    Which is NOT a characteristic of the corporate philanthropy aspect in American CSR?

    <p>Alignment solely with profit objectives. (A)</p> Signup and view all the answers

    What responsibility do businesses have towards society as per CSR principles?

    <p>Implement decisions that align with community values and expectations. (A)</p> Signup and view all the answers

    What is a key risk associated with using social causes for marketing, according to the content?

    <p>Loss of customer trust. (D)</p> Signup and view all the answers

    Which statement best represents the concept of shared value?

    <p>Creating economic value in a way that also creates value for society. (D)</p> Signup and view all the answers

    Flashcards

    Stakeholder Approach

    A strategy for managing business that considers various stakeholders beyond shareholders, like customers, employees, and the community, by categorizing them based on relationships, expectations, and influence.

    Stakeholder Categorization

    Classifying stakeholders based on their power, legitimacy, and urgency to understand their influence and expectations.

    Instrumental Motivation

    A driver of Corporate Social Responsibility (CSR) focused on business benefits like increased profits or brand image.

    Moral Motivation

    A reason for CSR driven by ethical considerations and a desire to address societal issues.

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    Relational Motivation

    A driver of CSR motivated by building strong relationships with stakeholders and fulfilling obligations.

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    Conflict of Interest

    Situation where stakeholders' interests may oppose each other or clash with corporate goals.

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    Cost-Benefit Analysis of CSR

    Evaluating the financial benefits against financial burdens of Corporate Social Responsibility.

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    Optimal Level of CSR

    The idea that an ideal level of Corporate Social Responsibility exists that maximizes profits while addressing stakeholder expectations.

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    Sustainable Business

    Business organizations' involvement in achieving a sustainable society.

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    Corporate Social Responsibility (CSR)

    The idea that companies have a responsibility towards society.

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    Corporate Philanthropy

    Companies' charitable giving.

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    Shared Value

    Creating economic value and social value simultaneously.

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    Bowen's definition of CSR

    Businesses fulfilling society's values and objectives.

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    American CSR

    More developed corporate philanthropy and explicit communication to stakeholders.

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    European CSR

    Differs from American CSR, potentially due to government roles.

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    Product sharing

    Offering products for shared use, often linked to a specific cause.

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    Volvic-Unicef operation

    A long-term product sharing program focusing on water access.

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    Water bottle initiative

    Each water bottle purchase contributes to a water access association.

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    Greenwashing

    A deceptive marketing tactic used by companies to portray themselves as environmentally friendly when their practices are not actually sustainable.

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    CSR (Corporate Social Responsibility)

    The concept that businesses have a responsibility to operate in a way that benefits not only shareholders but also stakeholders and society as a whole.

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    Negative Impact Reduction

    A strategy employed by businesses to minimize their harmful effects on society and the environment.

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    Positive Impact Enhancement

    The goal of businesses to increase their positive contributions to society, including economic development, job creation, and community well-being.

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    Carbon Sink

    Natural environments, such as forests and mangroves, that absorb and store carbon dioxide from the atmosphere.

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    CSR Differentiation

    When a company uses CSR initiatives to make its products or services stand out from competitors, attracting customers who value ethical practices.

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    CSR Demand Side

    Examining how consumers and other stakeholders influence demand for products and services based on the company's CSR practices.

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    CSR Supply Side

    Analyzing the resources, costs, and efficiency of implementing CSR initiatives within a company.

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    CSR Investment Decision

    Treating CSR initiatives like any other business investment, carefully evaluating potential benefits and costs.

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    CSR Opportunity and Impact

    Identifying opportunities for positive social impact through CSR and the potential benefits for the company and society.

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    CSR Stakeholder Identification

    Identifying all the groups or individuals who have a stake in the company's success, including customers, employees, and the community.

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    CSR Negative Impacts

    Analyzing the potential harm or negative consequences of a company's actions on stakeholders, such as pollution or unfair labor practices.

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    CSR Cost Reductions

    Identifying ways to reduce costs while improving CSR performance, such as using sustainable materials or reducing waste.

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    CSR Resource Productivity Enhancement

    Using CSR initiatives to make better use of resources, like training employees on sustainability or optimizing energy usage.

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    CSR Risk Management

    Identifying and mitigating potential risks associated with CSR, such as negative publicity, regulatory fines, or legal liabilities.

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    ISO 26000

    An international standard defining Corporate Social Responsibility (CSR). It emphasizes ethical, transparent, and responsible actions for sustainable development considering stakeholder expectations, legal compliance, and international norms.

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    Sustainable Development

    Development that meets the needs of the present without compromising the ability of future generations to meet their own needs, incorporating environmental and social factors.

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    Stakeholders

    Individuals or groups who can influence or be influenced by an organization's actions or decisions.

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    Primary Stakeholders

    Essential groups whose involvement is crucial for the organization's survival and achievement of its goals, such as employees, customers, investors, and suppliers.

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    Secondary Stakeholders

    Groups with less direct involvement in the organization but still influenced by or have influence on it, such as the media, community, and environmental groups.

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    Value Creation Process

    The activities that generate value for the organization and its stakeholders, from sourcing raw materials to delivering products and services.

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    Freeman's Stakeholder Definition

    A stakeholder is any group or individual who can affect or is affected by the achievement of the firm's objectives.

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    Categorizing Stakeholders

    Classifying stakeholders based on their power, legitimacy, and urgency, to understand their influence and prioritize relationships with them.

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    Stakeholder Relationship Management

    Actively engaging with stakeholders to understand their needs, expectations, and concerns, building trust, and proactively managing potential conflicts.

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    Study Notes

    SKEMA Business School - Key Skills for Corporate Transition

    • Course taught by Aurélie Peyron
    • Focuses on sustainable business practices and skills for corporate transition.
    • Course duration: 2024/2025 academic year.

    Key Skills for Corporate Transition

    • Understanding the dependence and impact of businesses on environmental systems and society.
    • Awareness of social acceptability issues of various technological transitions aimed at reducing environmental impact.
    • Ability to balance pros and cons in a social and environmental perspective of various technological options.

    Key Skills for Corporate Transition (Sessions)

    • Session 1: Economics (October 2nd - Ioannis Bournakis)
    • Session 2: Life cycle analysis (October 16th - Yoann Guntzburger)
    • Session 3: Sustainable business (October 30th - Aurélie Peyron)
    • Session 4: Innovation (November 20th - Sophie Chlela)
    • Session 5: Artificial intelligence (November 27th - Margherita Pagani)

    What is Sustainable Business?

    • Business organizations participating in society's sustainable development model.
    • Corporate philanthropy
    • Corporate Social Responsibility
    • Shared value

    Assessment

    • End session quiz on K2 - 20%
    • Midterm (30 minutes): 30 MCQs - 30%
    • Final exam (90 minutes): Open questions - 50%

    Environmental Problems

    • Climate change (e.g., images displayed on slides)

    Society Problems

    • Income inequality (e.g., images displayed on slides)
    • Employment issues
    • Human rights violations

    Sustainable Development

    • Definition by the Brundtland Commission:
    • "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

    17 SDGs (Sustainable Development Goals)

    • Images and links to overview various goals.

    Business Contribution to Sustainable Development

    • Eliminate negative impacts
    • Reduce negative impacts
    • Compensate negative impacts
    • Increase positive impacts
    • Create new positive impacts

    Example: Airline Industry - Air France-KLM

    • Fleet replacement: (percentage targets)
    • Sustainable aviation fuel (SAF) use
    • Eco-piloting and operational measures (e.g., single-engine taxiing)
    • Intermodality (combining train travel with air travel)
    • Carbon capture and storage projects
    • Societal programs (e.g., humanitarian aid transport).

    Business Contribution to Sustainable Development: How to Compensate Impacts

    • Support carbon capture projects
    • Support biodiversity conservation

    Employee Engagement in CSR

    • Individual programs: customers can purchase volumes of SAF based on the fuel consumption of their journey.
    • Corporate programs: companies can contribute based on their employees travel.

    Corporate Strategy & CSR

    • Product/service differentiation is sometimes unaffected by CSR.
    • Resource costs must be considered.
    • CSR treatment should be similar to other investment decisions.
    • Understanding stakeholder needs to evaluate negative impacts.

    Corporate Strategy and CSR (Examples)

    • Examples of issues (e.g., BP Deepwater Horizon, Nike boycotts).
    • Addressing cost reductions, risk management and reputational risk.

    Improve Well-Being and Productivity

    • Employee well-being is important.
    • Google's solutions: training, feedback, flexibility, and mobility.
    • 2020 study estimated cost of workplace discomfort to be over €14,000 per year, per employee.

    CSR Differentiation

    • Identify social issues and positive social impacts.
    • Costs reductions
    • Resource enhancement productivity,
    • Risks associated with financial penalties, regulatory changes.
    • Risk of business discontinuities
    • Reputational risk

    Example of Caisses d'Épargne (French bank)

    • Investments in sustainability

    Example of Schneider Electric (Q4 2023 Results)

    • Key performance indicators for sustainability initiatives

    Example of Ecotree

    • Plant-trees
    • Promotes climate action

    What is Share Value? (Porter & Kramer)

    • Create shared value by tackling social issues and focusing on sustainability.
    • Business model should be scalable.

    3 Levels of Actions

    • Reconceiving products and markets
    • Redefining productivity in the value chain.
    • Enabling cluster development

    Corporate Philanthropy

    • Viewed by Porter & Kramer as having old links between business and society
    • Also has a redistribution in value and takes account global issues.

    Example of Banking Industry

    • Customer repayment difficulty issues (loss of income, divorce) can be addressed by banks.

    CSR Conceived by Porter & Kramer

    • Stakeholder management
    • Corporate responsibility
    • Taking account for the negative impacts

    Shared value conceived by Porter & Kramer

    • Connections between business and society
    • Creating new value
    • Taking account of stakeholder value

    Critics of CSV (Creating Shared Value)

    • Unoriginal concept
    • Ignores social and economic tensions.
    • Naïve on corporate compliance issues
    • Shallow view of corporate roles

    Value Propositions of Sustainable Business

    • Questions to ask: Why should the company exist? What values should the company offer to its customers and stakeholders and other relevant questions.

    Addressing Environmental Issues

    • Sustainable supply chain with regenerative business model
    • Eco-design with modularity
    • Decarbonization with reshoring and disintermediation efforts.
    • Responsible consumption (product-service models)
    • Longer lifetime products and inputs

    Sustainable Supply with Regenerative Business Model

    • Examples from sustainable agriculture (e.g., social equality, use of chemicals, transport emissions, less nature, urban farming)

    Ecodesign with Modularity

    • Products designed for sustainability (e.g., modular design, easy repair/reuse of parts)

    Decarbonization with Reshoring & Disintermediation (Example)

    • Locating production closer to home (reshoring).
    • Removing intermediaries (disintermediation).

    Responsible Consumption with Product-Service Models

    • Examples like leasing rather than buying (e.g., the shoe company Bocage).

    Longer Lifetime for Products & Inputs (Examples: Aircraft industry)

    • Aircraft maintenance (re-use, recycling).

    Addressing Society Issues

    • Social inclusion (e.g., Bottom of the Pyramid (BOP) approaches)
    • Social Finance with microfinance
    • Democratic models with cooperative status
    • Stakeholder value governance.
    • Sharing economy

    Social Inclusion with Bottom of the Pyramid (BOP) Example: Tata Nano

    • Removing unnecessary features for affordability.
    • Maintaining fundamental features for safety and functionality.

    Social Inclusion with BOP Example: Grameen Danone Foods

    • Addressing malnutrition and poverty

    Social Inclusion with Pay What You Can

    • Pricing based on financial capacity (e.g., Wikipedia).

    Social Finance: Social Impact Bonds Mechanisms

    • Detailed graphic indicating players and their interactions

    Social Finance: Microfinance Example of Grameen Bank

    • Providing credit with no collateral to marginalized and impoverished populations.

    Democratic Models: Cooperative Status

    • The majority of employees are their own shareholders.

    Democratic Models: Freedom Leadership

    • Trust and equality
    • Freedom of initiative
    • Responsibility

    Stakeholder Governance: Stakeholder Value

    • Value creation, distribution and opportunity costs

    Stakeholder Governance: Purpose of the Organization

    • Benefit Corporations
    • Purpose Companies
    • Sociétés à Mission

    Sharing Economy

    • Exchange models for goods, transportation, and real estate.

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