Corporate Social Responsibility PDF

Chapter 4 Corporate Social Responsibilit y.  Corporate Social Responsibility Actions of an organization that are targeted towards the achievement of a social benefit over and above maximizing profits for its shareholders and meeting all its legal...

Chapter 4 Corporate Social Responsibilit y.  Corporate Social Responsibility Actions of an organization that are targeted towards the achievement of a social benefit over and above maximizing profits for its shareholders and meeting all its legal obligations Also known as corporate citizenship and corporate conscience Many companies awoke to CSR only after being surprised by public responses to issues they had not thought were their business responsibilities. 4-2  Management without Conscience Instrumental approach: Perspective that the only obligation of a corporation is to maximize profits for its shareholders in providing goods and services that meet the needs of their customers (as argued by Milton Friedman) Social contract approach: Perspective that a corporation has an 4-3  Management by Inclusion Actions of corporations impact: Customers Employees Suppliers Communities Impacts Positive Negative 4-4  Management by Inclusion Going beyond generating profit attracts a lot of attention Alcohol manufacturers have a long-term perspective and spread awareness about drinking responsibly Jim Roberts points out: “I like to think of corporate social responsibility as doing well by doing good. Doing what’s in the best long-term interest of the customer is ultimately doing what’s best for the company. Doing good for the customer is just good business.” 4-5 The Driving Forces Behind CSR Transparency Knowledge Sustainability Globalization The Failure of the Public Sector 4-6 The Driving Forces Behind CSR Group work: Find definitions and present Transparency Knowledge Sustainability Globalization The Failure of the Public Sector 4-7 The Driving Forces Behind CSR Transparency We live in an information-driven economy where business practices have become increasingly transparent. Companies can no longer sweep things under the rug. Knowledge The transition to an information-driven economy means that consumers and investors have more information at their disposal than at any time in history. They can be more discerning, and can wield more influence. 4-8 The Driving Forces Behind CSR Sustainability The earth’s natural systems are in serious decline. Cooperations are under increasing pressure to have business plans and strategies that are environmentally sound and contribute to sustainable development. Globalization Globalization represents a new stage of capitalist development. Public institutions protect society by balancing private corporate interests against broader public interests 4-9 The Driving Forces Behind CSR The Failure of the Public Sector Many developing countries are governed by dysfunctional regimes – some are disorganized or brutal or corrupt. Citizens then lose confidence in the public sector as the best or most appropriate venue for addressing a growing list of social problems. 4-10  The Driving Forces Behind CSR Corporations that choose CSR run the risk of creating adverse results Employees feel that they are working for an insincere organization Public sees little more than a token action concerned with publicity rather than community Organization does not perceive much benefit from CSR and so sees no need to develop the concept 4-11  The Triple Bottom Line Many companies have adapted their annual reports to reflect a triple bottom-line approach, for which they provide a social and environmental updates, alongside their primary bottom-line financial performance 4-12  Types of CSR Ethical CSR Organizations pursue a defined sense of social conscience in managing financial responsibilities to shareholders, legal responsibilities to local community and society as a whole, and ethical responsibilities to do the right thing for all their stakeholders Altruistic CSR Organizations take a philanthropic approach by underwriting specific initiatives to give back to the company’s local community or to designated national or international programs Philanthropic initiatives are authorized without concern for the corporation’s overall profitability Strategic CSR Philanthropic activities targeted towards programs that will generate the most positive publicity for the organization, but runs the risk of being perceived as self-serving behavior on the part of the organization 4-13  Carbon Footprint Total carbon dioxide emissions on an annual basis Carbon neutral - Way to off set damage being done to the environment through greenhouse gas emissions by purchasing credits from carbon-positive projects Kyoto Protocol - Requires developed nations to reduce their greenhouse gas emissions by funding projects in developing countries in return for 4-14