Corporate Social Responsibility (CSR)

Introduction to Corporate Social Responsibility

• Business must consider its responsibilities to society when making decisions.
• Society must accept its responsibilities for setting the standards for these decisions.

Social Responsibility Defined

• Responsible/responsibility are used in different ways attributing cause for an event/action.
• Being responsible causally doesn't carry ethical attribution; it describes events.
• Being responsible in another sense carries an ethical connotation referring to what a business ethically ought to do.
• Ethical responsibilities set limits to our decisions/actions.

Quick Concepts: Corporate Social Responsibility (CSR)

• Responsibilities businesses have to the societies they operate in.
• May refer to voluntary actions addressing economic, social, and environmental impacts and stakeholders' concerns.
• The European Commission defines CSR as a concept where companies voluntarily contribute to a better society and environment.
• CSR involves identifying stakeholder groups and integrating their needs/values into strategic/operational decision-making.

Corporate Social Responsibility Ethical Expectations

• Refers to ethical expectations society has for businesses.
• Ethical responsibilities involve things we ought/should do, are ethically expected to fulfill, and held accountable.
• CSR concerns society's interests that should restrict/limit business behavior, even at an economic cost.

Laws Regarding Product Liability

• Involves meanings of being responsible.
• Consumer injury requires identifying if the product caused the injury.
• Controversy of the drug Vioxx produced by Merck found that Vioxx caused heart attacks in some users, involving responsibility.

Levels of Responsibility

• Responsibility to do good: Ethical responsibilities to do good.
• Volunteering and charitable work are examples, ethically responsible.
• Not ethically mandatory/required.
• Corporate philanthropy is an example of social responsibility.

More Obligatory Sense

• The responsibility to prevent harm.
• Good Samaritan cases are examples.
• A company has responsibility to use renewable energy, even if its actions aren't causing harm.

More Demanding Sense

• A responsibility is not to cause harm to others.
• Called a duty/obligation, it binds or compels action.
• Society expects fulfillment and uses social sanctioning/law.
• A business ought not to sell a harmful product, even if profitable.

Duty for Business Not to Cause Harm

• The strongest sense of responsibility is the duty not to cause harm.
• Ethics demands that we not cause avoidable harm, even when not explicitly prohibited by law.
• If business causes avoidable harm through lack of due care, law and ethics hold it liable.
• Ethical duty not to cause harm overrides business's pursuit of profit.

Responsibility for Business to Prevent Harm

• Business is not causing harm but could easily prevent harm from occurring.
• A more inclusive understanding of corporate social responsibility would hold that business has a responsibility to prevent harm.

Responsibility to Do Good

• CSR standard holds business has a social responsibility to do good and improve society.
• Corporate philanthropy is the most obvious case.
• Corporate giving supports community projects in arts, education, and culture.

Philanthropy Cases

• Philanthropy is praised but not mandatory.
• Responsible person is charitable, but it is not an obligation.
• Businesses have an obligation to support good causes and "give back” to the community as a debt of gratitude.

Merck and River Blindness

• Merck's Mectizan drug prevents river blindness, which affects millions in tropical nations.
• Merck provides Mectizan free to at-risk people, cooperating with WHO, UNICEF, and the World Bank.
• Program has resulted in developing a healthcare system in some of the poorest regions of the world.
• Merck's corporate identity statement: "We are in the business of preserving and improving human life."

Discussion on Level of Responsibility

• Merck wasn't responsible for causing river blindness, so CSR model concludes no social responsibility.
• Management saw the issue differently and had a social responsibility to prevent a disease easily controlled by their patented drug.
• George Merck's quote: We try never to forget that medicine is for the people. It is not for profits.
• What level of responsibility did Merck practice?

Models of Corporate Social Responsibility

• Economic Model of CSR
• Stakeholder Model of CSR
• Integrative Model of CSR

Economic Model of CSR

• Primary responsibility of management: Maximize profit within the law.
• Management may also choose to contribute to society as a matter of philanthropy, but not as a matter of duty or social responsibility.
• Contribute for reputational purposes. Social responsibility contributes to profitability.
• Contribute because it is the right thing to do.

Stakeholder Model of CSR

• Business is embedded within a web of social relationships of mutual rights and responsibilities.
• Business managers have responsibilities to a range of stakeholders.

Integrative Model of CSR

• Social responsibility is integrated directly into the mission and purpose of the corporations
• (e.g., Benefit corporations, Ben and Jerry's).

Economic Model of CSR

• Most involved in the business would accept the general definition of the term corporate social responsibility (CSR).
• It is referring to the ethical responsibilities that a business has to the society in which it operates.
• From a narrow economic perspective, a business exists to benefit society by producing goods, creating jobs, also creating wealth.

Economic CSR

• It holds that businesses' responsibilities are to fulfill economic functions.
• Corporations are legal properties owners can use.
• Managers are employees or agents of owners and must work to further owners' interests.

Quick Concepts: Economic Model of CSR

• Limits a firm's social responsibility to the minimal economic responsibility of producing goods and services and maximizing profits within the law.
• CSR places shareholders at the center of the corporation.
• Management's ethical responsibility is to serve the shareholders.
• Managers have a primary responsibility to pursue profit within the law.

Corporations Expectations

• Expected to obey the legal mandates established by society.
• The economic model of CSR denies any social responsibilities beyond the economic and legal ends for which it was created.
• Managers have social responsibilities, but their primary responsibility is to serve shareholders.

Room to pursue Social Responsibilities

• Business is free to contribute to social causes as philanthropy.
• Business has no strict obligation to contribute to social causes, but it can be a good thing.
• Business has no strict ethical responsibility to serving wider social goods.

Charity

• Business should be encouraged to contribute to society in ways that go beyond the narrow obligations of law and economics.
• Approach is common for small, privately owned businesses.
• Owners often play a prominent leadership role within their local community.

Philanthropy offshoot

• Occasions in which charity work is done because it brings the firm good public relations, also good reputation within the community.
• You will likely see a list of local businesses that serve as donors/sponsors that have contributed to the event.
• Businesses have engaged in supporting these activities, and have received some benefit.

CSR Views

• Cases where business supports a social cause for good public relations are similar to the economic view of CSR.
• Business manager judges that the social contribution will have economic benefits, which is an investment.
• There is a deal between engaging in the economic model for reputational reasons and following the economic view.

Contributing in a Social Cause

• Some firms contribute to charity anonymously and support causes with little or no business payoff, as a matter of giving back.

Distinctions

• Economic model has business social cause done simply because it is the right thing to do and differs only in terms of motivation.
• Ethical actions are only philanthropy that is done for reputational reasons.
• Business managers cannot use corporate resources except to earn owners greater returns on their investment.

Stakeholder Model of CSR

• Second perspective on CSR is the stakeholder model of CSR.
• Business exists within a web of social and ethical relationships, also to create value for a range of stakeholders.
• Managers have responsibilities to all those with a stake in company success/failure, not only those financially invested.

Philosophical View on CSR

• Bowie argues beyond obeying the law, businesses have an ethical duty to respect human rights.
• Bowie appeals to moral framework and distinguishes responsibilities from principle-based traditional ethics.

Bowie's Approach

• Kantian theory of business ethics involves distinction between ethical imperatives to cause no harm, prevent harm, and do good.
• He believes that other considerations should override a strong duty to avoiding harm.
• Bowie accepts managers are agents of stockholder-owners with a duty to profit them and duty overrides good prevention.

Stakeholder Theory

• Bowie would argue that business has a social responsibility to respect the rights of employees even when not specified by law.
• Rights might include the right to safe and healthy workplaces, right to privacy, and right to due process.
• Duty managers have to stockholder owners overrides good preventions.

R. Edward Freeman

• His most influential version of stakeholder theory recognizes business decisions affect wide group.
• Think of well known business ethical cases and business manager made decisions produce far ranging consequences.
• Every decision also involves opportunities foregone, choices given up.

Stakeholder's Acknowledgment

• Recognize every business decision imposes costs, and these costs should be acknowledged.
• Manager maximizing profit imposes costs on employees, consumers and suppliers.
• Stakeholder model notes other ethical duties have equal claim on managerial decision making.

Questions to Ask

• Any theory of corporate and social responsibility must explain and defend answers to the questions.
• For whose benefit and at whose costs should the business be managed?

Legitimacy View

• View is justified by appeal to rights of owners, the fiduciary duties of managers, and the social benefits that follow from this arrangement.
• Stakeholder theory argues it is inadequate understanding of business.
• Stakeholders ask who are the stakeholders, what legitimizes their claims, practical view implications and reasons.

The Classical Model

• The classical model ignores over a century of legal precedent arising from both case law and legislative enactments.
• It recognizes wide range of managerial obligations to stakeholders such as consumers, employees, competitors, environment, etc.
• It is false to claim management can ignore duties to everyone but stockholders.

Examples of Aspects of Stakeholder Issues

• Provides examples of categories and issues of employees, customers, and investors as well as indicators of corporate impact of these areas.

Community and Potential Indicators

• Public health and safety protection impacts availability of Emergency response plan.
• Conservation of energy and materials impacts production of waste data.
• Donations support impact employee time spent in community service.

Environmental Groups

• Minimizing the use of energy impacts the electricity purchased. Environmental groups: Minimizing the use of energy.

Integrative Model of CSR

• Should business be expected to sacrifice profits for social ends?
• Literature of CSR assumes a tension between pursing profit and social responsibility.

Organizations

• Organizations turn this tension around pursuing social ends as core division
• Such as hospitals, Schools, colleges, and government agencies.

For-Profit Organizations

• Social responsibility has social goal as an impact on strategic mission, placing responsibility at a corporate level and purpose.
• Even advocates of the narrow economic model of CSR such as Milton Friedman would agree that owners of a firm are free to make these.

Sustainability in CSR

• There are claims that every business can adopt social goals. There is some that may cause some ethical issues and concerns.
• Sustainability offers model of CSR which are relevant concerns that could increase.

Quick Concepts: Integrative Model of CSR

• Social responsibility is fully integrated with the firm's mission or strategic plan.
• Sustainability holds that a firm's financial goals must be balanced against environmental considerations.
• The present economic model harms sustainability within daily life.
• Success is judged against both Ecological and financial lines.

Ethical Issues and Dilemmas in Business

• Ethical issue is a problem/situation requiring choosing among actions needing evaluation as right/wrong, or ethical/unethical.
• Ethical dilemma is a problem/situation that requires choosing among wrong/unethical actions with only less unethical/illegal choices.

Abusive/Intimidating Behavior

• Abusive/intimidating behavior-common ethical problem.
• Means anything-physical threats, false accusations, being annoying, profanity, insults, yelling, being harsh, ignoring someone.
• What means one thing may mean another.
• Productivity is damaged by that time which is used to unravel these relationships.

Abusive Behavior and Cultures

• It involves asking someone to complete a project or speaking profanely.
• Intent is a consideration in this and male manager asking female subordinate is a mistake if trying to compliment.
• Our new multicultural environment involving different groups and the businessperson is involved with the depths of it all.

Actions

• Spreading rumors, blocking communication, flouting status, discrediting opinions, using demeaning emails, not communicating, being insulting
• Discrimination terminology and hurtful language are all action to be taken in workplace bullying of employees.
• Bullying in the workplace is now a legal issue. Employers should follow steps to minimize this and tolerate it.

Bullying by Monopolization

• Bullying occurs between companies in intense competition.
• Advanced micro Devices AMD has stated lawsuit against large companies like Intel that has not allowed them to compete.
• AMD has stated there was much trouble with them and it may have threatened legal implication.

Intel High Profile Account

• Example of intense competition and Intel's ability to use its large size won it the high-profile Apple account over IBM and Freescale.
• Intel offered 600 Indian engineers, European Union found company guilty of antitrust violations anti-competitive behavior.
• EU concluded Intel preventing the company from being competitive.
• The company was charge 1.45 billion.

Lying

• Relates to distorting the truth, with three types of lies.
• One form can become very cumbersome for businesses: lying by commission or omission.

Commission VS Omission Lying

• Creating perception/belief via words that intentionally deceive the receiver (e.g., lying about work, expense reports).
• Omission: Intentionally not informing channel member of differences, problems, etc., significantly affecting awareness or intention.

Ethics and Lie

• The lie has context and intent to distort the truth.
• Some believe one must lie a little or the org sanctions the occasional dishonesty.
• Transparency are other values with ethical values.

Quick Examples Lying

• Tobacco that did not allow negative research.
• Vioxx has not informed as the side effects.
• Lying damages lawsuits in civil or legal cases.

Conflicts of Interest

• A conflict of interest exists with one's own interest, interest of org or interest of another group.
• The medical industry faced accusations of conflicts, Harvard received average of F due to interest.
• In order to avoid conflicts, private interest avoid business dealings by one and all.

Bribery

• Practice of offering something to gain illicit advantage.
• Key is whether the act is illicit or contrary to accepted morality/convention, varying by situation.
• Can be active/passive, where active is promising/giving and passive is an official receiving the bribe.

Quick Example Bribery

• Some pay a fee to get paid out.
• Government seeks favorable conditions and ethics is taken with issues to the Justice System to uncover all of bribery.

Corporate Intelligence View

• Many issues related to corporate intelligence have surfaced.
• Defined Broadly- Corporate is the collection and analysis and information customers
• There are models of intelligence which are top management strategies that have been taken into account of trade secrets today.

What is corporate intelligence?

• Discovery of information like regulatory filings and press releases.
• Is a legitimate inquiry into meaningful information to stay competitive.
• Can be abused if due diligence is not maintained.

Example Lawsuit of Corporate intelligence

• Firm accusing it of espionage with patented system.
• Accessing valuable info includes physically removing copying into another hard drive and ethical methods diving into one and other.

Website Hack

• Commonly used to get trade secrets.
• Tools that require no in-depth knowledge of addresses.
• It has System Hacking.

System Hack Account

• Attacker already has access to a low-level, privileged- user account.
• Remote hacking involves remotely penetrating a system.
• Higher access is sought.

Examples of Remote Hacks

• Unexpected inputs. Default configurations which could lead to admin practices.
• Physical hacking involves agent search with login name.

Discrimination Overview

• Person’s racial prejudices belong to domain of ethics with discrimination.
• Discrimination creates ethical issues within the world.
• Color racial is illegal in some countries.
• In the United States if refuse to hire an individual can create legal matter.

Workforce's in Action

• In order to workforce to reach all customs an affirmative action.
• These initiatives may be imposed by fed law by state or federal.

Supermarket discrimination

• Safeway chain is a program that expands the gender gap with lawsuit.
• They voluntarily implemented affirmative plans in more workforce.
• They help employees identify women.

Governing of What is being Done

• Note two decades of supreme quotas are used to govern decisions.
• Affirmative action doesn't permit/require quotas or treat discrimination.
• Courts ensure that guidelines guide programs, qualified candidates are temp and limited.

Race and Ethnicity in Service

• Discrimination is when can companies personal personal customers.
• Discriminate to only serve higher charges to a group.
• Alleging passengers or south east Asians has been settled.

Sexual Harassment

• Define as unwanted behavior by 1 person towards another verbal and nonverbal.
• Can occur between genders.
• Courts states this material is protected.

Human Rights Issues: United Nations

Has dealt with cases of Sexual Harassment and the results are slow. In order to establish conduct employees must understand this means the work environment. It has various things that must be achieved for this which all must include to claim for it’s. The issue interferes with claimant’s work performance.

Advances

• This is an issue with employment status and treatment which can be regarded as in some statements civil long if employer.
• The civil wrong is if did not take steps to take action.
• Focus is the impact of behavior and not intent.

Dual-Relationship Harassment

• Duality is loving relationships with those you spend to share professional responsibilities with
• Impairment/judgement conflict can all take place.
• Unless action consent can always and there after be questioned.

The Court Case

• A professor makes advances to office assistant.
• She confided authorities and other claims occurred.
• University then told him he had to learn some things within this. It involves a company and employee and the sexual harassment in Florida where courts took action of this.

What Is Fraud?

• Advance your own to advance other’s results in charges.
• Purposeful communication damages to create false info.
• Crime is convictions to both or either parties.
• Costs billions of companies for those by employees.

Committing Fraudulent Activity

• What are stealing supplies and shoplifting to claiming have working for more.
• Major ethical issues involving consumer issues.
• Accurate Info is by million dollar actions due to criminal penalties.

What is Quick Examples for Auditing Fraud

• New audit is KPMG new Century audited problems which led to their collapse.
• The scandal has increased and increased this action and led to the change to restate the earnings as well.

Business Area of Marketing

• Potential issues with generating products. -Lying is ethical problems because it destroys trust inside or externally.
• Marketing can also cost high prices.

Lies and Advertisements

• Advertisements concealed facts is lying with point of advertising claims.
• Placed ads in categories one and the next on falsity.
• Lanham Act with reasonable buyer reliance is not actionable under it.

Advertising Product Claims

• The shaving product was claimed to have better more cleaner shave than ever on customer in that lie.
• The court did not and state that as consumer get whole claim false within the ad.

Meaning: Deceive the Public

• Literally they is imply another falsehood to others.
• Character ads often include an area and topic to prove ads from another.

Advertising Abuse

• This involves ambiguities and weak statements within the consumer.
• The weasel words are not for deception and is great example.
• Consumers give ethical information for the consumers with the choice and they receive them.

Labelling Issue

• Settlement of lawsuits as it involves exaggeration a company needs to discount fee to donate to charity with various statements.

Facts Within: Advertising

• Anxious to sell medical policy and mention to cover illnesses is indeed a fraudulent activity to inform customers.

Fraud and Consumers

• Those engage in Fraud forms and business tag claims along returns for advantage.
• It effects others and retail claims to purchase more from clothing to make a profit.
• Fraud is deception that causes a group or activity.

Deception Claims

• Shoplifting and duplicity are the actions of the consumer.
• For example, cashier will not give prices and discount to the next action which causes damage to the stores to their attention and actions
• The consumer will receive refund and this action may claim for defect.

Person's Craft vs. Honor

• This is person is of right vs. wrong behavior to get a advantage on others.
• Advantage goes against behavior or and will allow prosecution from that on.
• Businesses do not know how to verify this.

Claims of FTC and Fraud

• Fraud claims is 25 million engaging in consumer annually states fraud.
• Shoplifting makes nearly 37 percent losses and with this they take in retail service's.

How to Maintain Privacy

• Consumer advocates warn threats especially in health care and internet.
• Using more increases creates a privacy issue which includes monitoring technology and personal security.

Issues

• Research consumers will remain suspicious even if the products are cheap.
• Customers are still providing personal info during risks as well.
• Business still struggle to meet needs also desires for protecting privacy.
• Limited options for protecting rights.

Employees and Tech

• Allows business flexibility to provide company property.
• Monitoring and technological helps employees gain more data.
• Computer monitoring has companies obtain data.

Productivity

• Over 596 companies have fired workers of this.
• Most are monitoring the employees.
• Inform their workers about companies info.

Personal Matters

• Policy helps govern email blogs over company time.
• Companies help control the personal calls.
• Review their calls and phone numbers for surveillance.

Informing Privacy

• Convey policy reduce opportunity on lawsuit and issues.
• If fails to monitor use can come a huge number within the courts with great action.
• Show great privacy the helps resolve lawsuits.
• Dimensions of privacy with consumers and helps the control use.

What Can Companies Learn

• Companies reserve all rights to click and it goes online,
• Can watch and track consumers activity wthout consent
• Commercial sites is personal identifying info from Visitors.

Quick Analysis

• Electronic monitoring productivity.
• Provides companies the ability to act with various solutions.
• Survey said personal is a serious business.