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?

Using cost-benefit analysis to match increased revenue with higher costs Signup and view all the answers

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

The moral right of stakeholders to have their interests considered Signup and view all the answers

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

Navigating conflicts of interest between different stakeholder groups Signup and view all the answers

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

To pursue multiple motivations such as moral, relational, and instrumental factors Signup and view all the answers

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

They influence corporate strategies based on their power and legitimacy Signup and view all the answers

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

Developing carbon capture projects Signup and view all the answers

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

Prioritizing short-term profits over long-term sustainability Signup and view all the answers

How does horizontal decentralization benefit corporate social responsibility initiatives?

It allows for faster decision-making across teams Signup and view all the answers

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

They foster creativity and local decision-making Signup and view all the answers

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

Regularly engaging stakeholders in decision-making processes Signup and view all the answers

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

Shareholders and consumers Signup and view all the answers

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

Financial penalties and new regulations Signup and view all the answers

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

Investment decisions Signup and view all the answers

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

Low ability to differentiate products or services Signup and view all the answers

What can firms potentially gain from successfully implementing CSR?

Enhanced reputation and stakeholder trust Signup and view all the answers

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

Loss of consumer trust Signup and view all the answers

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

Improved resource productivity Signup and view all the answers

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

Financial penalties Signup and view all the answers

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

Resource costs associated with CSR promotion Signup and view all the answers

How can CSR initiatives potentially affect relationship with consumers?

They can improve customer retention Signup and view all the answers

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

Enhancing organizational transparency and ethical behavior Signup and view all the answers

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

Any individual or group that can affect or is affected by the firm’s objectives Signup and view all the answers

Which statement best describes the stakeholder approach to governance?

It categorizes stakeholders based on their contribution to value creation. Signup and view all the answers

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

Power and decision-making are distributed across various teams. Signup and view all the answers

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

Ignoring stakeholder expectations Signup and view all the answers

What is the significance of identifying primary and secondary stakeholders?

It leads to an improved understanding of community impact and stakeholder relationships. Signup and view all the answers

What common misconception exists regarding CSR compliance with laws?

Legal compliance is optional in CSR implementation. Signup and view all the answers

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

It emphasizes the dependence between organizations and various groups for their survival. Signup and view all the answers

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

Understanding and addressing the needs and expectations of stakeholders Signup and view all the answers

Why is stakeholder engagement important for sustainable development?

It helps organizations align their goals with the societal and environmental needs. Signup and view all the answers

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

It risks being seen as exploitative. Signup and view all the answers

How can product-sharing initiatives gain credibility?

By aligning with the core business and committing long-term. Signup and view all the answers

Which definition best explains Corporate Social Responsibility (CSR)?

The alignment of business practices with societal values. Signup and view all the answers

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

American CSR places more emphasis on corporate philanthropy. Signup and view all the answers

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

There is a need for correspondence between business activities and societal values. Signup and view all the answers

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

Higher alignment with corporate governance principles. Signup and view all the answers

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

Alignment solely with profit objectives. Signup and view all the answers

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

Implement decisions that align with community values and expectations. Signup and view all the answers

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

Loss of customer trust. Signup and view all the answers

Which statement best represents the concept of shared value?

Creating economic value in a way that also creates value for society. Signup and view all the answers

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

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

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

Addressing malnutrition and poverty

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

Detailed graphic indicating players and their interactions

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

Exchange models for goods, transportation, and real estate.

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