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[page129-149]
Terms in this set [60]
Corporate social responsibility [CSR]*
-has many definitions to date
-one is the way a corporation achieves balance among its economic, social, and environmental responsibilities in its operations so as to address shareholder and
other stakeholder expectations
-is integrated into a corporation's operations through its values, culture, decision making, strategy, & reporting mechanisms
CSR aka?
-corporate responsibility
-corporate accountability
-corporate ethics
-corporate citizenship
-sustainability
-stewardship
-tripe-E bottom line [ economic, ethical, environmental]
How is CSR integrated into a corperation's operations?
through its
-values
-culture
-decision making
-strategy
-reporting mechanisms
five key elements of CSR*
1]corporations have responsibilities that go beyond the production of goods&services at a profit
[RESPONSIBILTIES BEYOND MAKING PROFIT]
2]these responsibilities involve helping to solve important
social problems, esp those they have helped created.
[SOLVE SOCIAL PROBLEMS, ESP ONES THEY CREATED]
3]corps have a broader constituency than shareholders alone.
[BROADER CONSTITUENCY THAN SHAREHOLDERS]
4]corps have impacts that go beyond simple marketplace transactions
[IMPACTS BEYOND SIMPLE MARKETPLACE TRANSACTIONS]
5]corps serve a wider range of human values than can be captured by a sole focus on economic values
[SERVE WIDER RANGE OF HUMAN VALUES-than on just
economic]
Dahlsrud identified five dimensions of CSR existed:
1] environmental: the natural environment
2] social: the relationship b/w business & society
3] economic: socio-economic and financial aspects
4]stakeholder: stakeholders & stakeholder groups
5] Voluntariness: actions not prescribed by law
expectations are placed on business due to its three roles:*
1] as an institution in society
2]as a particular corporation or organization in society
3] as an individual managers who are moral actors within the corporation
in short:
-institutional
-organizational
-managerial discretion
3 principles of corporate social responsibility?*
1] legitimacy
2] public responsibility
3]managerial discretion
principle of legitimacy*
refers to society's granting of legitimacy and power to business, and business' appropriate use of that power and the possibility of losing that power.
-CSR defines the institutional relationship b/w business and society that is expected of any corporation.
-the focus is on business' obligations as a social institution , & society takes away power or
imposes some sort of sanction on business if expectations are not met.
principle of public responsibility *
means that business is responsible for outcomes related to its areas of involvement with society
-level of application is organizational- that is, the corporation- and confines business' responsibility to those problems related to a firm's activities & interests
-principle involves
emphasizing each corporation's relationship to its specific social, ethical, and political environ.
principle of managerial discretion*
refers to managers as moral actors who are obliged to exercise such discretion is avail to them to achieve socially responsible outcomes
-discretion is involved bc actions of managers are not totally prescribed by corporate procedures
-level of application is the
individual who has the choices, opportunities, and personal responsibility to achieve the corporation's social responsibility
importance of CSR?
-originally ppl feel that business enterprise had fulfilled its social responsibility by surviving & realizing the maximum profit possible [CSR was to operate profitably, & the corp could not survive w/o profits, much less play a social role]
-recently belief that business exists for more than profits [or economic goals], with public expecting something else from business.
-orginal concept of social responsibility involving the maximization of profits -modified-> although profits made, social goals are also important.
society depends on business to achieve social as well as economic goals, that is social responsibilities are placed on business.
principles of CSR [table page 132]** [ look at each bullet and compare]
Principle of Legitimacy
-external focus on expectations of society
-society grants the right to business to operate
-adherence to social norms of society
>pressures particularly strong on some corporations, e.g. large ones or consumer products
Principle of Public Responsibility
-beyond general expectations of society, that is, at the corporation level
-determined by uniqueness for
circumstances of the corporation
>resource dependence determines
>involves managing relationships with immediate environment
Principle of Managerial Discretion
-involves individual choice or managerial discretion
-individual decision makers or managers determine
-relates to latitude of action possible by management
>focuses on range of strategic options avail to management
CSR DEBATE [CASE FOR INVOLVEMENT]
-business must satisfy society's needs
-CSR prevents public criticism and govt regulation
-business & society at interdependent
-CSR is good for the bottom line
-investors and consumers support CSR
-addressing social problems can become financial opportunities [i.e.: pollution abatement]
-business should take long-term CSR approach
-social actions improve public image & goodwill
-business can solve some social
problems as well as govt
-proactive approach is better than reactive
-businessppl are also concern citizens
CSR debate [counterargument to the case for involvement]
•Profit maximization is the primary purpose of business [e.g., Milton Friedman]
.•Business is responsible to shareholders
.•Social policy is role of government.
•Business lacks training in social issues.
•CSR would give too much
power to business.
-Business involvement in social matters increases costs.
•No reliable guidance for business in CSR matters
.•Business cannot be held accountable unlike social institutions.
•There is divided support in business community for social involvement.
3 social responsibility theories **
1]amoral view
2]personal view
3]social view
amoral view**
traditional view of business as merely profit-making entity
-believe there's no such thing as CSR
examples of amoral view theories of social responsibility
fundamentalism
-the corp has no/very lil social responsibility
legal recognition
-the corp is an autonomous entity & not the creation of society
individual agreement
-corps can be
socially responsible, but only within the limits of a prior contractual agreement
traditional shareholders model
-beyond individual agreements, corps are not ethically required to be socially responsible; they are responsible only to monies and to maximize profits
personal view**
corporations are like ppl & can therefore be held accountable for their actions
social view**
corps are social institutions with social responsibilities
examples of social-view theories:**
-social contract
-stakeholder
-social permission
-social impact
-social interpenetration
social contract **
-implicit social agreement
-exists between
business & society
-determines the social nature of the corp, identifies, its duties & rights,
-evolving document
stakeholder**
there is a social responsibility function of the interrelationships developed by the corporation with groups that have a stake. This approach was also referred as "constituency theory". This theory is one of the main underpinnings of this book
social permission**
society can legitimately demand the corp do certain kinds of activities
- if the corp is harming the public good, can restrict or eliminate its activities
social impact*
business has the power to change society and must consider social responsibilities
social interpenetration **
business is so intertwined with society that it cannot avoid social responsibilities
4 kinds of CSR/social responsibility *? [already in order top to bottom pyramid] page 140
1]PHILANTHROPIC [desired]
-"be a good corporate citizen"
-contribute resources to the community; improve quality of life
2]ETHICAL [expected]
-"be ethical"
-obligation to do what is
right, just, & fair. Avoid harm.
3]LEGAL [required]
-"obey the law"
-law is society's codification of right & wrong. Play by the rules of the game.
4]ECONOMIC [required]
-"be profitable"
-the foundation upon which all others rest.
"be a good corporate citizen"
philanthropic
"be ethical"
ethical
"obey the law"
legal
"be profitable"
economic
the 4 kinds of social responsibility which one is required, desired and expected?
philanthropic
-desired
ethical
-expected
legal
-required
economic
-required
corporate sustainability [CS]*
refers to corporate activities demonstrating the inclusion of social and environmental as well as economic responsibilities in business operations as they impact all stakeholders.
5 levels of CS*
1]Compliance-driven CS
2]profit-driven CS
3]Caring CS
4]Synergistic CS
5]Holistic CS
Compliance-driven CS*
[follow regulations]
-involves following govt regulations and responding to charity and stewardship considerations considered appropriate by society
profit-driven CS
[focus on bottom line]
-consideration is given to the social, ethical, and environmental aspects of business operations provided they contribute to the financial
bottom line
caring CS
[ go beyond legal compliance]
-initiatives go beyond legal compliance and profit considerations where economic, social, and environmental concerns are balanced, as it is the right thing to do.
Synergistic CS
[ well balanced solutions]
-well-balanced and functional solutions are sought that create
value in the economic, social and environmental areas, as it is a winning approach for all stakeholders
Holistic CS
[fully integrated CS]
-corporate sustainability is fully integrated and embedded in every aspect of the corp's activities, as this is important to the quality and continuation of life on this planet
'follow regulations'
compliance driven
'fully integrated CS'
holistic
"go beyond compliance"
caring
"focus on bottom line"
profit driven
"well balanced solution"
synergistic
reputation mangement*
is any effort to enhance the corp's image & good name
-in past, focus was on media and public relations & crisis management.
-but today, focus on relations with all stakeholders
-take long time established, but can be destroyed quickly
social impact management*
as "the field of inquiry at the intersection of business needs and wider societal concerns that reflects and respects the complex interdependency between the two
-business & society approach
social impact management evaluates 3 aspects of a business:*
1.purpose of business
2.social context of business
3.metrics: how performance & profitability measured
triple-E [economic,ethical, and environmental] bottom line [TBL]*:
evaluates a corporation's performance according to a summary of the economic, social, and environmental value the corporation adds or destroys.
what is triple-E bottom line
-economic
-ethical
-environmental
corporate citizenship*
occurs when a corp demonstrates that it takes into account its complete impact on society, environment and economy.
good corporate citizenship can provide business benefits in 8 areas:
1] Reputation management
2]Risk profile and risk management
-risk is reduced
3]Employee recruitment, motivation, & retention
-easier to obtain & keep employees
4]Investor relations and access to capital
5]Learning and innovation
6]Competitiveness and market positioning
7]Operational efficiency
8]License to operate
3 Views on Corporate/business Citizenship
1]limited
2]equivalent
3]extended
limited view
focus on corporate giving
-considered to be enlightened self-interest
equivalent view
emphasis on sustainability
-rebranding or relaunching ideas or concepts of business
extended view
defined as a set of individual, social, civil, & political rights
business citizenship*
Includes the responsibilities of corporate citizenship on a local and national basis and extends it to a global or universal scope
VBA model pg148
Integrates and unifies five frameworks in common usage by academics and managers based on three core concepts: VALUE; BALANCE; & ACCOUNTABILITY.
-Corporate Social Responsibility [CSR]
-Business Ethics [BE]
-Stakeholder Management [SM]
-Sustainability [SUS]
-Corporate Citizenship [CC]
what are the five frame works?
-Corporate Social Responsibility [CSR]
-Business Ethics [BE]
-Stakeholder Management [SM]
-Sustainability [SUS]
-Corporate Citizenship [CC]
VALUE:
normative foundation:
-Utilitarianism
-caring
BALANCE:
normative
foundation
-moral pluralism
-justice/fairness
-kantianism/respect
-moral rights
ACCOUNTABILITY:
normative foundation:
-transparency
-trustworthiness
-honesty
-reliability
-integrity
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