Corporate Social Responsibility & Business Ethics

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Questions and Answers

Which of the following is a potential risk of not practicing Corporate Social Responsibility (CSR)?

  • Legal issues (correct)
  • Attracting ethical investors
  • Increased customer loyalty
  • Enhanced brand reputation

The shareholder view states that businesses should consider all groups affected by their actions, not just focus on profit.

False (B)

What does ESG stand for, in the context of evaluating CSR performance?

Environmental, Social, Governance

Companies that are only pretending to be socially responsible without taking any real action are engaging in ______.

<p>greenwashing</p> Signup and view all the answers

Match the following terms with their definitions:

<p>CSR = A company’s duty to contribute positively to society. Triple Bottom Line (TBL) = A measure of business success based on people, planet, and profit. Ethical Responsibility = Doing what is right beyond what the law requires. Sustainability = Meeting present needs without harming future generations.</p> Signup and view all the answers

Which type of CSR is primarily motivated by avoiding legal issues or scandals?

<p>Reactionary CSR (D)</p> Signup and view all the answers

Reputational CSR always involves genuine and impactful actions that contribute positively to society and the environment.

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

In Carroll's Pyramid of CSR, what is the most fundamental responsibility of a business?

<p>Economic Responsibility</p> Signup and view all the answers

The Triple Bottom Line (TBL) measures a company's success based on People, Planet, and ______.

<p>Profit</p> Signup and view all the answers

Match the type of CSR with its corresponding description:

<p>Reactionary CSR = Done only to avoid trouble. Reputational CSR = Done to improve brand image. Responsible CSR = CSR is integrated into business strategy. Collaborative CSR = Works with stakeholders to solve social problems.</p> Signup and view all the answers

Which of the following is a component of the 'Social' aspect within Environmental, Social, and Governance (ESG) criteria?

<p>Employee well-being (C)</p> Signup and view all the answers

Small businesses always face greater challenges in implementing CSR compared to large corporations.

<p>True (A)</p> Signup and view all the answers

According to the shareholder view of corporate responsibility, what is the primary focus of a business?

<p>Maximizing profits while following laws and ethical customs. (C)</p> Signup and view all the answers

What is greenwashing?

<p>A company claims to be eco-friendly but still exploits workers</p> Signup and view all the answers

A company donating money to clean up pollution exemplifies the 'Do No Harm' moral duty.

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

Name one way businesses exert cultural power.

<p>through media and branding</p> Signup and view all the answers

The moral duty that requires companies to take corrective action to fix past mistakes is known as ______.

<p>remove harm</p> Signup and view all the answers

Which of the following is NOT one of the forms of power held by businesses?

<p>Bureaucratic Power (A)</p> Signup and view all the answers

The stakeholder view suggests companies should ONLY focus on making money for shareholders.

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

Which action represents a business fulfilling the 'Prevent Harm' moral duty?

<p>Reducing pollution output (D)</p> Signup and view all the answers

Match the following moral duties with their corresponding actions:

<p>Do No Harm = Avoiding actions that negatively impact the environment Prevent Harm = Implementing measures to reduce pollution Remove Harm = Cleaning up a polluted river Promote Good = Investing in renewable energy sources</p> Signup and view all the answers

Flashcards

Corporate Social Responsibility (CSR)

The ethical obligations of businesses towards society and the environment.

Ethics in Business

Knowing right from wrong and choosing to act ethically in business practices.

Moral Duty Continuum

A framework outlining businesses' responsibilities from 'Do No Harm' to 'Promote Good'.

Do No Harm

The principle that businesses should avoid causing harm to people or the environment.

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Shareholder View

The perspective that a business's only responsibility is to maximize profits for shareholders.

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Stakeholder View

The approach that businesses must balance profits with social and environmental concerns.

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Economic Power of Businesses

The ability of businesses to generate wealth and influence economies.

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CSR in Action

Different forms that corporate social responsibility can take in practice.

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Reactionary CSR

Corporate actions taken only to avoid negative consequences like lawsuits or scandals.

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Reputational CSR

CSR efforts aimed at improving a company's image, sometimes misleadingly (greenwashing).

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Responsible CSR

Integrating CSR into business strategy for long-term benefits while making profits.

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Collaborative CSR

Engaging with stakeholders and communities to actively solve social issues.

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Carroll's Pyramid of CSR

A model showing different levels of business responsibility: Economic, Legal, Ethical, and Philanthropic.

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Triple Bottom Line (TBL)

A measure of success in three areas: People, Planet, and Profit.

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Environmental, Social, and Governance (ESG)

Criteria used by investors to evaluate a company's CSR performance.

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CSR in Small Businesses

Small businesses face challenges and advantages in implementing CSR due to resources and community impact.

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Risks of Ignoring CSR

Potential legal issues, reputation damage, and loss of investors.

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Greenwashing

Pretending to be socially responsible without genuine action.

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Ethical Responsibility

Doing what is right beyond legal requirements.

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Sustainability

Meeting present needs without harming future generations.

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Study Notes

Corporate Social Responsibility (CSR) & Business Ethics

  • CSR is the ethical and moral obligations of businesses towards society
  • It benefits shareholders, employees, customers, communities, and the environment
  • Ethics involves knowing right from wrong and choosing to do what is right

Understanding Ethics in Business

  • Ethics defines the difference between right and wrong, choosing the right course of action.
  • Moral Duty Continuum range from "Do No Harm" to "Promote Good"
    • Do No Harm: Avoid harming employees, consumers, or environment
    • Prevent Harm: Actively stop harm like pollution
    • Remove Harm: Fix past mistakes
    • Promote Good: Positively contribute to society
    • Example: polluting a river fails "Do No Harm"; donating to clean it up promotes "Good."

Business, Power, and Responsibility

  • Businesses hold power in many ways:
    • Economic Power: Influence economies by generating money
    • Technological Power: Innovation of new products
    • Political Power: Influencing governments
    • Cultural Power: Shaping society through media
    • Social Power: Impacting workers and communities
    • Example: Tech giants wield economic, technological, political power dramatically impacting how people work, communicate, and vote.

Corporate Responsibility: To Whom?

  • Shareholder View (Milton Friedman): Businesses only responsible for maximizing profits while following laws and ethics. Focus only on profit for shareholders.
  • Stakeholder View (Broader CSR Approach): Businesses should balance profit with social & environmental concerns. Consider the impact on employees, customers, communities, and the planet.
    • Example: reducing carbon emissions and fairly treating employees while making a profit.

CSR in Action: Different Approaches

  • Reactionary CSR: Done only to avoid trouble (lawsuits, scandals).
    • Example: Installing safety measures only after an accident.
  • Reputational CSR: Done to improve brand image (greenwashing).
    • Example: a fashion brand claiming to be eco-friendly but exploiting workers.
  • Responsible CSR: Integration of CSR into business strategy.
    • Seeks long-term benefits.

Collaborative CSR

  • Works with stakeholders to solve social problems.
  • Actively engages with communities.
    • Example: Banks partnering with NGOs to improve financial literacy in low-income areas.

Carroll's Pyramid of CSR

  • A model showing different levels of responsibility:
    • Economic Responsibility: Make a profit.
    • Legal Responsibility: Follow laws and regulations.
    • Ethical Responsibility: Do what's right beyond the law.
    • Philanthropic Responsibility: Give back to society.
    • Example: Microsoft donates to education while making profits and following laws.

Measuring CSR: ESG & Triple Bottom Line

  • Triple Bottom Line (TBL): Measures success in three areas:
    • People (Social Impact): Employee welfare, fair wages, community benefits.
    • Planet (Environmental Impact): Sustainability, pollution control.
    • Profit (Economic Impact): Financial performance
  • ESG (Environmental, Social, Governance): Framework to evaluate CSR performance.
    • Used by investors to assess companies' CSR efforts.

CSR and Small Businesses

  • Challenges: Limited resources for CSR.
  • Advantages: Direct, personal impact on communities.
    • Example: A local café sourcing coffee from fair-trade farmers and donating food.

Risks of Not Practicing CSR

  • Legal Issues (fines, lawsuits).
  • Reputation Damage (loss of customer trust).
  • Loss of Investors (ethical investors avoid irresponsible businesses).
    • Example: A major oil spill can result in lawsuits, protests, lost customers.

Glossary

  • CSR (Corporate Social Responsibility): A company's duty to contribute positively to society.
  • Ethical Responsibility: Doing what's right beyond what the law requires.
  • Shareholder View: Belief that businesses should focus only on profit.
  • Stakeholder View: Belief that businesses should consider all groups affected by their actions.
  • Greenwashing: Pretending to be socially responsible without real action.
  • Triple Bottom Line (TBL): A measure of business success based on people, planet, and profit.
  • ESG (Environmental, Social, Governance): A framework for evaluating CSR performance.
  • Sustainability: Meeting present needs without harming future generations.

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