Corporate Social Responsibility

Introduction to Social Responsibility and Ethics

• Corporate Social Responsibility (CSR) encompasses concepts relating to businesses and their societal roles.
• The popularity of CSR recently has made the term vulnerable to misuse, like other management terms.
• Corporate Social Responsibility requires companies to act responsibly in their business activities

Emergence of Corporate Social Responsibility

• Various ancient texts imply that moral obligations were part of trade and commerce.
• Modern publications in the 1930s addressed business's role in society.
• Corporate Social Responsibility became a major concern for companies in the 1960s.
• Pressures on companies increased to correct harmful impacts from business operations.

The GAIA Principle

• This principle states that all life is interdependent.
• Earth's ecosphere and living matter form a complete, interdependent system necessary for sustaining life.
• Firms are part of this system and are liable for their activities whose consequences are external to the firm.

Defining Corporate Social Responsibility

• CSR means corporations adjust their behavior according to societal values and expectations.
• Howard Bowen defines CSR as arising from corporate decisions' impact on people's lives.

Defining Corporate Social Responsibility, continued

• Accepting voluntary or additional responsibilities beyond economic interest and law constitutes CSR.
• Davis defines CSR as considering and responding to issues beyond narrow economic, technical, and legal requirements.

More Definitions of Corporate Social Responsibility

• Forstater et al. (2002): CSR includes company actions contributing to sustainable development via core business activities, investment, and public policy debate.
• McWilliams and Siegel (2001): CSR includes actions that appear to further some social good beyond the firm's interest and legal requirements.

Approaches to Social Responsibility

• Notable views on business responsibilities include those by Milton Friedman, Archie Caroll, and Andrew Carnegie.

Friedman's View

• Friedman believes business's only social responsibility is increasing profit within legal bounds.
• Cutting prices to prevent inflation, reducing pollution, or hiring the unemployed constitutes inappropriately is spending shareholders' money.

Carroll's View

• Archie Carroll identifies four responsibilities for business managers: economic, legal, ethical, and discretionary.
• Economic Responsibilities: Producing goods and services of value so the company can repay creditors and stockholders.
• Legal Responsibilities: Obeying governmental laws.
• Ethical Responsibilities: Following beliefs about how to act in a society.
• Discretionary Responsibilities: Voluntary obligations like philanthropic contributions.
• Ethical responsibilities are what companies should do, discretionary are voluntary.

Carnegie's View

• Andrew Carnegie saw corporate social responsibilities based on principles of charity and stewardship.
• The Charity Principle: Wealthier society members assist the less fortunate, namely the unemployed, handicapped, sick, and elderly.
• The Stewardship Principle: Businesses and wealthy individuals act as caretakers of their property and it should be used for any purpose that society deems legitimate.

The Principles of Corporate Social Responsibility

• Sustainability: Society should not use more resources than generated.
• Sustainability: Actions today also need to account for future opportunities.
• Sustainability: Organizations are thus required to use resources and waste disposal systems in a friendly manner.

The Principles of Corporate Social Responsibility, Accountability

• An organization must acknowledge and be responsible for the effects of their actions on the external environment.
• Organizations should report to all parties affected by their actions and warn potential victims of any danger.

The Principles of Corporate Social Responsibility, Transparency

• Transparency means all acts are communicated and obvious to all parties.
• CSR requires organizations to make their actions and reports clear with accurate and detailed information whether reported as facts or numbers.

Prominence of Corporate Social Responsibility

• Key drivers of CSR engagements: Sustainable development, globalization, governance(UN), Corporate Sector Impact, Tech, Ethical, Finance, Business Tool, Education, Crisis management

Arguments for and Against CSR

• Milton Friedman believed shareholder value conflicted with CSR as it misused company resources. CSR may be seen as a waste of shareholder's money
• Complying with societal values and actively participating in society benefits business long-term.
• CSR improves reputation which gains more customers, employees, and other benefits.

Arguments for and Against CSR, Resource Fir

• There is a second dispute on the role of business in dealing with social problems because business has valuable resources to tackle social problems.
• Some argue that the company may possess significant competencies but lack the specific knowledge of the skills and experience needed to deal with some issues.

Arguments for and Against Accountability

• Accountability because of their structure, companies are mainly accountable to their shareholders so some say that businesses should focus on pursuing economic profit rather than getting involved in other roles in society.
• CSR undermines democracy -- governments can reform regulations for unethical practices undertaken my business.
• CSR diverts attention from government which is the body that should control the market and benefit society.

Criticisms / Arguments against CSR

• Friedman argues that CSR is solely to make a profit. He believes it involves "Business of business is business". He considers it to be a useless PR exercise, imposes in equal cost to the organizations but has a lack of regulation.

Criticisms/Arguments for CSR

• Interdependence of firms and the society
• Stakeholder interest may transcend financial benefits
• Benefits of CSR - Helps attract qualified staff. Reduces involvement, improves corporate image, lead to improved financial performance

Forms of Corporate Social Responsibility issues

• Concern of consumers - Are products safe and well designed, priced fairly, is the ad clear, are credit terms adequate, is info available and are the customers treated fairly

Forms of Corporate Social Responsibility Issues, continued

• Concern for employees
  • Payment
  • Safe work environment
• Workers hired, promoted and treated fairly, training and opportunities
• If they get equal employment opportunities of rehabilitation for those with mental or physical abuse

Form of CSR issue, continued

• Concerned about the environment -
• Adequately protected from pollution, noise.
• Products are packages, biodegradable or recyclable
• Safety hazards carefully disposed of

Forms of CSR Issues, continued

• Does the film support minority and other Enterprises
• donations made to develop and support education, art, health and Community programmes
• Is the social impact considered

From Shareholder Value to Stakeholder Thinking

• Stakeholder thinking frames the corporate behaviour - Balance a multiplicity of interests to distribute business benefits to employees dealers, local communities and nations.

What are stakeholders

Is an organization that is effected by the corporations purpose, the stakeholders comprise of groups of similar issues in the corporation and those group include shareholders, employees, customers and suppliers.

What are the Stakeholders, continued

• Stakeholders may have multiple interests in an organization. - Stakeholder groups must categorize the issues in many ways - internal and external, however, this has to be with a company.
• Internal Stakeholders (Managers and employees)
• External Stakeholders (Customers, shareholders, creditors, Government, Society and Suppliers)

Stakeholder Importance

• Power of a stakeholder and stakeholders derive their power from the mix of sources of resources and relationships, legal arrangements that allow degree of influence. Customers and supplies can effect corporate performance.

Stakeholder Importance , pt2

Legitimacy of the stakeholder's relationship with the company and legitimate activities are in compliance.

• Urgency of the stakeholder claim - Urgency calls for immediate attention through sensitive timeliness the more the delay is to do it, the more intolerable it becomes.

Stakeholder theory is when a company is at the heart of a hub of relationships between all stakeholders in society

Responsibilities stakeholders

• The responsibility from business is to guarantee safety to protect consumer information and promote customer relations
• Ensure no child labor, fair employment, protect employee safety in union - employee relationship management
• save energy, reduce environmental impacts of charity donations and cooperate with NP0 and strategic charities
• Pay taxes and The policy response

What is corporate social initiatives

-Kotler and Lee corporate social initiative as major activities by in order to fulfill corporate social responsibility - social initiative in the business

• The second is from has any policy benefit that can exist for the business through program practice.

Corporate Social marketing

• Called promotions
• Cause-related marketing
• Social marketing
• Corporate Philosophy
• Community volunteering
• Social business practices

Corporate Cause Promotion

• Provide funds or resources to raise of social concerns of volunteer recruitment for a cause

Commonly -Create issues of society such as educating for programs or supporting

• May manage -Promotions on its own or be a major partner or be a sponsor

Between Cause Forms

• It differs from related mark that that contributes on support are not Tied company of specified products focus is not behavior signing or contribution, such as with money money or

Typical Cause promotions

Focus on communication objectives -

• building with presents or sharing real people to Find to informative which is a lot like

• persuading their needs the resources -Participating is promoting issues

Positive corporate benefits

Brand positioning is builds customer loyalty Creates brands. Convenient to control social causes and is something they get involved in so society gets stronger.

When a corporate is there

-When opportunity printing services.

• When is supported by cost
• When campaigns and development will.

In developing brief.

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Potential concerns of corporate class

Visibility is promotional

• Investment

• Requires more time in water - Often replicate competitive advantage

Cause Marketing

Corporation commits to a donation. Is it addressing the social objectives - Contribute to a business or percent sales of a charity High inter connections sales specific product is the children charities.

Corporate crossmarketing

• Nestle is used to promises then or empty and run a promotion that is used on the network - Donating percent to football

Corporatives mark is there include

• Sales -Donating or selling a commission to foundations

• Product will need to have sales related five per sales up to

When is the market considered -

They've had products for distribution or co-branding with the corporate objectives

Steps to planning process

• Assessment by the companies
• Market is the target market strongly connected to
• How are the partner explorations and who is their donor basis

Levels of fundraising evaluation plans mix for ps or bs.

Benefits on Cross marketing.

• Maintaining customers

• Fundraising -Nich markets

• Creating partnership with something is it - increasing sales

Corporate Social Marketing

• The corporation supports behaviors campaign to prevent environment or well being

• is its own thing and not just something

• driving eating tobacco or anything is well market products as well.

Typical campaigns

To prevent -Health like tobacco -Cancer - skin eating help

• injury is safety - drowning suicides and emergency response

• Environment is water liter and wildlife animals

• Community is criminal rights and

Potential business benefits

• positioning

• Brand different positioning -Traffic is not it

• What do they get

• Profitable help

• Partner credibility

• Social chance

• More benefits with less

Potential concern

The issues not very good.

• That happens

• Supporting

• If not your place but need

• It's

Element Corporate Social Marketing

Behavior you want to change

• who or need

• Barriers

• Plan better with training

• That results is what you should give.

In other words

• describe Plan with the -Select what -Set the goals-Motivations position, what it - And find them.

Corporate philanthropy

Traditional donation of resources to charity

May can grant grants

Donating or using the equipment

And the benefits can include

Positioning -Citizen

• Ethical position

The keys to success are Lining out which goals were or not

Community of volunteering

• Volunteer is a corporate way supporting time for local Community leaders - It could be expertise given as a gift
• Matching to teams volunteering, the community may show their ethics there as well.

Cash grants include

• cash -Internal is the

The projects from helping

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What are their concerns?

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Explore corporate social responsibility, initiatives, and ethical behavior. Understand philanthropy, social marketing campaigns, and the GAIA Principle's relation to social responsibility. Learn about corporate contributions and promoting ethical employee behavior.