CSR Overview and Key Milestones

Questions and Answers

Which organization launched the Global Compact in 1999?

International Labor Organization

International Monetary Fund

World Economic Forum

United Nations (correct)

What year was the Global Sullivan Principles of CSR launched?

2001

2000

1999 (correct)

1998

What was a key objective of the Global Sullivan Principles regarding workplace diversity?

Mandating quotas for minority hiring

Encouraging equal opportunity for all levels of employment (correct)

Creating a workforce without any diversity

Eliminating discrimination in hiring

What significant act was amended in the UK in 2000 concerning socially responsible investment?

Pension Act Signup and view all the answers

What does the FTSE4Good Index represent, launched in 2001?

An ethical investment stock market index Signup and view all the answers

Which document in 1999 addressed corporate governance and non-financial risks in the UK?

The Turnbull Report Signup and view all the answers

As of 2004, how many government initiatives relevant to CSR were noted?

Over 60 Signup and view all the answers

What was a significant focus of the 1999 meeting held in Bonn regarding the Kyoto Agreement?

Penalties associated with non-compliance Signup and view all the answers

What is included in the elements of the exercise of Corporate Social Responsibility (CSR)?

Setting of objectives Signup and view all the answers

According to Keith Davis in 1973, what must firms evaluate in their decision-making process?

The effects on the external social system Signup and view all the answers

What does the term 'good neighborliness' refer to in the context of Corporate Social Responsibility?

Voluntarily helping to solve neighborhood problems Signup and view all the answers

What aspect of corporate behavior does H. Gordon Fitch highlight in his definition of CSR?

Attempting to solve social problems caused by the corporation Signup and view all the answers

What does social responsibility imply according to S. Prakash Sethi in 1975?

Meeting the expectations of stakeholders and the market Signup and view all the answers

What does the Social Involvement Disclosure (SID) Scale categorize corporate social issues into?

Environmental concerns and community involvement Signup and view all the answers

According to Preston and Post, what is the scope of managerial responsibility in relation to social responsibility?

Defined by primary and secondary involvement areas Signup and view all the answers

In the 1970s context of Corporate Social Performance, what was a significant trend?

Increased emphasis on Corporate Social Responsibility Signup and view all the answers

What is an essential responsibility of businesses regarding customer information?

To provide truthful and factual information, including risks. Signup and view all the answers

Which principle emphasizes the importance of customer education regarding product use?

Educate customers on safe and responsible usage. Signup and view all the answers

What is one of the requirements of the CSR policy under the Indian Companies Act (2013)?

Spend 2% of average net profits annually. Signup and view all the answers

Which of the following reflects a business's duty to ensure fair competition?

Ensuring no restrictions on freedom of choice and competition. Signup and view all the answers

What should businesses do in response to customer concerns?

Implement adequate grievance handling mechanisms. Signup and view all the answers

What principle must businesses follow during product advertising?

Advertise products in ways that do not mislead consumers. Signup and view all the answers

In which area should companies prioritize their CSR spending?

In their local area and the surrounding communities. Signup and view all the answers

How should businesses approach the use of natural resources?

Exercise care to avoid over-exploitation. Signup and view all the answers

What is the primary focus of the first principle of the National Voluntary Guidelines?

Ensuring ethical conduct and governance Signup and view all the answers

Which principle emphasizes the need to respect and promote human rights?

Principle 5 Signup and view all the answers

What should businesses do when influencing public and regulatory policy according to the guidelines?

Do so in a responsible manner Signup and view all the answers

What is one of the core elements of conducting business with ethics?

Developing governance structures that promote ethical conduct Signup and view all the answers

Which principle encourages businesses to provide safe goods and contribute to sustainability?

Principle 2 Signup and view all the answers

Which of the following principles supports the well-being of all employees?

Principle 3 Signup and view all the answers

What should businesses do to ensure transparency according to the guidelines?

Communicate decisions that impact relevant stakeholders Signup and view all the answers

Which principle emphasizes the importance of engaging with and providing value to customers responsibly?

Principle 9 Signup and view all the answers

What is critical in the process of stakeholder synthesis?

Considering all stakeholders' influence on management's mission Signup and view all the answers

What is meant by 'multi-fiduciary stakeholder synthesis'?

Balancing the needs of multiple conflicting stakeholders Signup and view all the answers

Which principle is fundamental to stakeholder management?

Organizational prudence supplemented by legal compliance Signup and view all the answers

What does the learning phase in decision-making involve?

Reinforcement or modification of decision steps based on outcomes Signup and view all the answers

What risk is associated with overoptimism in strategic success and virtue?

Manipulating virtue to achieve strategic success Signup and view all the answers

What is an essential aspect of decision-making processes according to PASCAL?

Analyzing implications focused on affected parties and decision-maker values Signup and view all the answers

What is a key characteristic of strategic stakeholder synthesis?

Recognizing the influence of multiple stakeholders on the central mission Signup and view all the answers

What does the 'choice' phase in PASCAL refer to?

Synthesis of available options to guide selection Signup and view all the answers

Study Notes

CSR involves setting objectives, deciding whether to pursue them, and financing those objectives.
The 1970s saw increased emphasis on Corporate Social Performance (CSP).

Key Milestones in CSR Development

1973: Keith Davis emphasized the obligation to evaluate decisions' social impacts to achieve social benefits alongside economic gains.
1973: Eilbert & Parket introduced the concept of good neighborliness, advocating for the avoidance of actions that harm local communities and the voluntary role in solving local issues.
1974: Eells & Walton highlighted the CSR movement’s concern for business involvement in social improvement.
1975: S. Prakash Sethi differentiated between social obligation as a response to market forces and legal constraints versus social responsibility that aligns with societal norms.
1975: Preston and Post defined public responsibility, restricting managerial responsibilities to specific involvement areas.
1976: H. Gordon Fitch described CSR as a serious attempt to resolve social problems caused by corporations.

In 1979, Abbott & Monsen categorized 28 issues within the SID Scale focusing on environment, equal opportunity, personnel, community involvement, and products.

Global Initiatives and Developments

1999: The Global Sullivan Principles were launched in the US to support economic, social, and political justice and promote human rights.
1999: UN's Global Compact aimed to unite companies with UN agencies and civil society to uphold principles related to human rights, labor, and the environment.
1999: UK legislation was enacted requiring corporations to disclose non-financial risks alongside financial risks.
2000: The UK Pension Act mandated pension trustees to disclose their CSR policies.

Corporate Responsibility Indices

2001: The FTSE4Good Index was launched in the UK as a stock market index for ethical investments.
2002: The first Corporate Responsibility Index was initiated by Business in the Community in the UK.

National Voluntary Guidelines (2011) in India

Guidelines apply to all businesses regardless of sector or size, emphasizing ethical conduct, transparency, and accountability.
Key Principles:
- Ethics, Transparency & Accountability in governance.
- Safety and sustainability of goods and services.
- Promotion of employee well-being.
- Respect and responsiveness to all stakeholders, particularly marginalized groups.
- Respect for human rights.
- Environmental protection and restoration.
- Responsible public policy influence.
- Support for inclusive growth.
- Responsible engagement with customers.

Indian Companies Act (2013)

Mandates the formation of a CSR Committee and CSR Policy.
Requires companies to spend at least 2% of average net profits from the previous three years on CSR activities.
Companies are encouraged to prioritize spending in local areas.

Homework and Analysis

Students are to analyze Business Responsibility Reports to identify CSR principles and engage in discussions considering stakeholder impacts and decision-makers’ priorities.

PASCAL Framework (Goodpaster, 1991)

Involves synthesizing available options, implementing chosen strategies, and learning from outcomes to enhance future decisions.

Stakeholder Analysis

Emphasizes understanding stakeholder perceptions and synthesizing viewpoints for practical responses.

Strategic Stakeholder Synthesis

Suggests that while various stakeholders are considered, stockholders take precedence due to fiduciary responsibilities.

Multi-fiduciary Stakeholder Synthesis

Involves balancing the often conflicting needs of multiple stakeholders, recognizing the obligation to make profits for investors while considering the impacts on other affected parties.

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Description

This quiz explores the fundamentals of Corporate Social Responsibility (CSR) and its evolution over the decades. Key milestones from the 1970s highlight the development of CSR concepts and the emphasis on balancing social impacts with economic objectives.