Adaptive Community for the Continuity of Education and Student

Services National Teachers College

Good Governance and Social Responsibility

Week 1 Ethics and Business

1. Nature of Business
2. The Importance of Ethics in Business
3. The Relationship Between Ethics and Business
4. The Morality of Profit
5. Definition of Business Ethics

Week 2-3 The Different Normative Ethical Theories Commonly Used in Business Decision Making

1. Kohlberg’s Stages of Moral Development

2. The Machiavellian Principles
3. Utilitarianism
4. The Principle of Rights and Virtues: The Kantian Ethics
5. John Rawls’ Principles of Justice
6. The Moral Positivism of Hobbes
7. Divine Command Ethics
8. Ethical Egoism of Ayn Rand

Week 4-5 Corporate Governance and Ethical Considerations

1. Elements and Concepts of Corporate Governance

Approaches to Corporate Governance

1. The Two Distinct Approaches to Corporate Governance

2. Characteristics of the Rule-‐based Approach
3. Characteristics of the Principle-‐based Approach
4. Development of a Corporate Codes of Conduct and Ethics

Week 6 Ethics and Social Responsibility

1. The Concept of Corporate Social Responsibility

2. Historical Phases of CSR
3. Perspective on CSR
4. Assessment on the Practice of CSR
5. The Four Corporate Social Responsibilities
6. Social Responsibility Towards Consumers
7. Social Responsibility Towards the Community and the Environment

BAC12 Good Governance and Social

Responsibility School of Business, SY 2022-2023
 Adaptive Community for the Continuity of Education and Student
Services National Teachers College

Week 6

What is Corporate Social Responsibility (CSR)?

Corporate Social Responsibility (CSR) is when a corporation goes beyond making money and engages in
actions that results in social good, beyond the interests of the corporation which is required by law
(McWilliams, Siegel, & Wright, 2006).

Types of Corporate Social Responsibility

There are two types of corporate social responsibility: a Traditional CSR and a Contemporary CSR. In a
Traditional CSR, a company generates its profits and creates value without much consideration for wider
societal consideration beyond shareholders and at times customers. In a traditional CSR they will raise funds
and make donations however it has little to do with how they function as a company. In a Contemporary CSR,
they view responsible behavior as a means to generate profits while living up to society’s expectations, CSR
is part of their daily business.

CSR Examples

∙ Supporting charity and philanthropy initiatives

∙ Going beyond legal requirements in adopting progressive human resource management
programs
∙ Not testing product on animals
∙ Recycling
∙ Preventing pollution
∙ Supporting local businesses
∙ Endorsing products with social attributes or characteristics

Historical Development of CSR

∙ The concept of corporate social responsibility can be tracked back to the 1960s, when sweeping social
and environmental movements began to influence the expectations consumers had of corporate
behavior in the United States.

∙ Activists began to launch campaigns to demand that corporations treat employees with respect and
fairness, create programs of philanthropies to improve the community, and practice environmental
sustainability.

∙ Consumers came to expect corporation to have moral, ethical, and philanthropic obligations to the
local community and – in a larger sense – to the global community.

∙ Corporations began to invest time, manpower, and money in order to develop policies, practices and
philanthropic programs that addressed serious problems such as poverty, urban blight and crime,
educational fairness, access to technology, and economic development in developing countries.

∙ In the 1990s, CSR became an established part of corporate culture, influencing the ways
corporations communicate with stakeholders and consumers and the ways in which business
treat employees, the environment, and communities.

BAC12 Good Governance and Social

Responsibility School of Business, SY 2022-2023
 Adaptive Community for the Continuity of Education and Student
Services National Teachers College

Domains of CSR

Archie Carroll and Mark Schwartz came up with a three-domain approach to Corporate Social
Responsibility that includes the economic, legal, and ethical domain.

∙ Economic Domain- Captures the activities that are meant to have a positive economic impact on the
corporation (direct or indirect).

∙ Legal Domain- This refers to the business firm's responsiveness to legal expectations mandated and
expected by society in the form of federal, state, and local jurisdictions, or through legal principles as
developed in case law.

∙ Ethical Domain- This refers to ethical responsibilities of business as expected by the general
population and relevant stakeholders.

Benefits of a CSR Include:

∙ Responsible businesses attract more investors, reduce their risks and address stakeholder’s
concerns.
∙ Creating a better environment while making a profit.
∙ Most consumers prefer to buy products from companies that use CSR.

Drawbacks of a CSR

∙ Many critics view corporate social responsibility as a ploy that companies use as a means to
generate profit.

CSR - Responsibility to Stakeholders

It is fundamental to satisfy stakeholders‟ needs. There is much to be taken into consideration as an

organization, while focusing to meet shareholder’s satisfaction without satisfying to some degree the
needs of other stakeholders. It turned attention to considerations beyond direct profit maximization. In
other words, even when an organization seeks to serve its shareholders as a primary concern, its success
in doing so is likely to be affected by other stakeholders (Foster and Jonker, 2005; Hawkins, 2006).

Implementation of Stakeholder Values

BAC12 Good Governance and Social Responsibility

School of Business, SY 2022-2023

Adaptive Community for the Continuity of Education and Student Services

 National Teachers College

How to Apply CSR to a Business?

Instead of viewing CSR as an initiative look at it as a way of doing business. Little steps make a
substantial difference.

∙ The Environment- “Think Sustainably”. Just by doing simple things in your office such as shutting of your
computer monitor and recycling paper can help not only the environment and the bottom line.

∙ Staff Welfare- “Invest in your staff”. Get your staff involved, make it a point to hear their opinion and most
of all keep them motivated. Employees will do a better job when they feel like they have a purpose
and feel like they are helping to make a difference.

∙ Community- “Support your local community”. If possible, create part time jobs and purchase locally.
Support the communities needs and challenges by creating programs and grants.

Developing CSR strategy

One way to think about the intersection of CSR and Strategy is to focus on the formulation and
implementation of a distinct CSR strategy. Typical steps would be a planning phase, an implementing
phase, and an evaluation phase, with the last phase potentially initiating a feedback loop to build on
successes and learn from mistakes.

BAC12 Good Governance and Social Responsibility

School of Business, SY 2022-2023

Adaptive Community for the Continuity of Education and Student

Services National Teachers College

Reporting and Auditing of CSR

In this process, it is crucial for stakeholders to find out whether the company has acted responsibly or not. A
socially responsible company has to prove to its stakeholders that it is „doing the right thing‟. Companies have
long been required to audit and report on their performance, albeit with regard to a very limited range of issues
and to just one main stakeholder. The annual report reports on the financial performance of the firm, and is
primarily prepared for the purposes of shareholders and, to a lesser degree, governments. However, non-
financial reports inform various stakeholders about performance regard to social and environmental issues.
(Brown et al, 2009)

Reasons for reporting and auditing:

∙ Economic reasons - Social and environmental issues might pose a threat to the company’s financial
performance. In order to manage these risks, companies need to know about them and monitor them
over time.

∙ Political reasons - Increased power might call for more transparency and accountability to the public
in terms of how the corporation has impacted on society; in the same way that a government
might report on its social impacts.

∙ Integrating demand - from stakeholders Increasing transparency and credibility brings more
interest into the business.

4 Types of Corporate Social Responsibility

Environmental Responsibility

For companies committed to CSR, it’s important for businesses to engage in environmentally friendly practices.
Corporations can be significant contributors to greenhouse gas emissions, pollution, waste, and natural
resource depletion—but by committing to environmental responsibility, a business takes ownership over its
impact on the environment.

Depending on a business’s size and industry, environmental responsibility can take many different forms. For
some companies, it means using alternative energy sources and sustainable materials. For others, it means
enacting a company-wide recycling program or donating to and volunteering for local environment-focused
organizations.

Ethical Responsibility

Being ethically responsible means ensuring a business engages in fair business practices across the board
—including treating all employees, stakeholders, and customers ethically and with respect. This type of CSR
can also take a lot of different forms. Some common examples of ethical responsibility include setting a
higher minimum wage, guaranteeing all materials are ethically sourced, and ensuring that all employees
receive competitive pay and comprehensive benefits as well as treated with respect.

Philanthropic Responsibility

In today’s world, it’s almost expected for businesses to give back to the communities they exist in and
donate to causes that align with their company mission. When businesses do this, they’re following
through with their philanthropic responsibility.
This philanthropic responsibility can be as small scale as sponsoring a local nonprofit’s annual fundraiser or
as large-scale as donating a percentage of a business’s annual earnings to a prominent cause.

BAC12 Good Governance and Social

Responsibility School of Business, SY 2022-
2023

Adaptive Community for the Continuity of Education and Student

Services National Teachers College

Economic Responsibility

When a business is acting with economic responsibility in mind, it is making financial decisions that prioritize
doing good, not just making more money. This means that this type of CSR is intertwined with the other
types above.

For example, this could mean that a business signs a contract with a supplier that uses sustainable materials—
even if it costs more. Another example of economic responsibility is when a company commits to a transparent
salary system that fairly compensates all employees and makes up for past gender and race pay gaps.

The responsibility towards consumers that Corporate Social Responsibility includes is as follows:

∙ To provide goods of standard quality

∙ To charge fair prices

∙ To provide prompt and courteous after sale services

∙ To handle consumer complaints and grievances quickly

∙ To avoid unfair trade practices like adulteration, black marketing and hoarding. ∙
The responsibility towards workers that Corporate Social Responsibility includes is as follows:

∙ To provide fair and regular wages

∙ To provide good working conditions

∙ To ensure welfare facilities like housing, medical, social security, etc.

∙ To provide with opportunities for growth and development

∙ To adopt objective (fair) performance appraisal system.

The responsibility towards the Government that Corporate Social Responsibility includes is as follows:

∙ To abide by the laws of the land

∙ To pay fares and duties regularly

∙ To refrain from corrupting public servants.

Prominent Corporate Social Responsibility Practices by Big Companies

∙ Mahindra Group’s project “Nanhi Kali” focuses on educating the girl child.
∙ Disney supports the conservation of the environment. It has protected the coral reefs and has planted
over three million trees.
∙ Maruti Suzuki encourages community development. Village development is done by construction of
toilets, upgrading Government schools and so on.
BAC12 Good Governance and Social
Responsibility School of Business, SY 2022-
2023

Adaptive Community for the Continuity of Education and Student

Services National Teachers College

∙ Colgate Palmolive has advocated dental health by distributing free health care packs and samples.

∙ Infosys has provided schools with computers and has helped build 60000 libraries and toilets. What

is environmental CSR?
Environmental CSR aims to reduce any damaging effects on the environment from your business
processes. Activities may focus on:

∙ energy use
∙ water use
∙ waste management
∙ recycling
∙ emissions
∙ eco-friendly office and business travel policies

Some of these are significant from both environmental and financial points of view.

Advantages of environmental CSR

Green CSR can reduce business risk, improve reputation and provide opportunities for cost savings.
Even the simplest energy efficiency measures can generate savings and make a difference to your
business. For example:

∙ switching off lights and equipment when not in use

∙ reducing the use of water
∙ reducing the amount of paper, you waste

Caring about the environment can increase revenue too. Many customers prefer to buy from responsible
companies.

For more information, find out how to improve your environmental performance.

How to reduce your environmental impact?

You can reduce your business' environmental impact in many ways. For example, you can:

∙ create products that can be recycled

∙ optimize your product life cycle
∙ source responsibly (e.g. using recycled materials and sustainable timber)
∙ reduce packaging
∙ buy locally to save fuel costs
∙ create an efficient (and fuel-efficient) distribution network
∙ work with environmentally conscious suppliers and distributors

BAC12 Good Governance and Social

Responsibility School of Business, SY 2022-2023