CSR

Corporate Social Responsibility (CSR) as a

Concept

Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management; 11th Edition. © 2023 Cengage. All Rights Reserved. May
not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1
 Introduction: Examining Corporate Social Responsibility

‘Why’ and ‘what’ of CSR

• Continuously evolving concept

• In the interest of enterprises
• Promotes sustainability
• Enhances social values
• Stabilises BGS triad (see figure)

In some definitions, CSR is viewed as a movement.

Benefits stakeholders in three realms: Social, economical and environmental

2
3
Introduction: Examining Corporate Social Responsibility

Characteristics of CSR

• Evolving concept
• Business practice
• Stakeholder targeted
• Sustainability aimed
• Socially oriented
• Economically oriented
• Environment centred
• Adaptively defined
• Mandated by governance

3
4

Perspective of CSR

• Perspective of CSR is the relationship of its aspects with other

interactive elements and with itself.

• These aspects, in general, are the obligations to stakeholders,

environment, economics, ethics, philanthropy and legal regime.
Can change with additions in future (see figure next).

4
5
CSR obligations within the perspective of CSR

Stakeholder Compliance

Economics Ethics

Environment Philanthropy

? CSR ?

5
6
Introduction: Examining Corporate Social Responsibility

Scope of CSR

• Scope provides boundaries to activities contained in the

concept. Includes…

a) Behaviour appropriate to a corporate citizen

b) Contributions to social development
c) Stakeholder focused activities
d) Compliance
e) Ethics
f) Growing with society

6
7

Scope of CSR (continued)

g) Customer loyalty and goodwill

h) Environmental harmony
i) Social harmony
j) Dynamism
k) Whistleblowing system
l) Organisational self-assessment
m) Esprit de corps among employees

7
8
Introduction: Examining Corporate Social Responsibility

Environment and CSR

• Natural environment today is also termed as a stakeholder

• It is also termed natural capital
• Corporations engage in many environmental activities today
• Environmental obligation of business can also be termed
corporate environmental responsibility

8
9

Corporate Social Responsibility

Future of CSR (See figure next)

• Concept is expected to evolve dynamically in future

• In course of time…

 legal mandate widens

 Corporate responsibility spreads into other terrains—
ocean, airspace, outer space, cyberspace…
 Ethical practices under watchful eyes of government and
society
 Global regime and global watch

9
Business Criticism–Social Response Cycle

10
Corporate Social Responsibility Related
Concepts

11
 Evolving Meanings of CSR

• CSR means seriously considering the impact of a company’s actions on society.

• Social responsibility is the obligation of decision makers to take actions that
protect and improve the welfare of society as a whole along with their own
interests.
• CSR supposes that the corporation has not only economic and legal obligations,
but also certain responsibilities to society that extend beyond these obligations.
• These definitions provide useful insights into the concept of CSR.

12
 A Four-Part Definition of CSR

While each definition is valuable, we will focus on the types of social

responsibilities business has. At any given point in time, societal expectations
included in corporate social responsibility are:
• Economic
• Legal
• Ethical, and
• Philanthropic

13
 The Four Components of CSR
The Four Components of CSR: Types, Expectations, Explanations, & Examples
Type of Responsibility Societal Expectations Explanations/Examples
Economic responsibility REQUIRED of business Be profitable. Maximize sales, minimize costs. Make sound strategic
by society decisions. Be attentive to dividend policy. Provide investors with
adequate and attractive returns on their investments. Provide jobs.
Legal responsibility REQUIRED of business Obey all laws, adhere to all regulations. Environmental and consumer
by society laws. Laws protecting employees. Fulfill all contractual obligations.
Honor warranties and guarantees.
Ethical responsibility EXPECTED of business Avoid questionable practices. Respond to spirit as well as to letter of
by society law. Assume law is a floor on practice, operate above minimum
required. Do what is right, fair, and just. Assert ethical leadership.
Philanthropic responsibility DESIRED/EXPECTED of Be a good corporate citizen. Give back. Make corporate contributions.
business by society Provide programs supporting community—education, health or human
services, culture and arts, and civic. Provide for community betterment.
Engage in volunteerism.

14
The Pyramid of Corporate Social
Responsibility

15
Case on CSR

16
Top 20 Activities/ Characteristics of a Socially
Responsible Company (1 of 2)
• Makes products that are safe.
• Does not pollute air or water.
• Obeys the law in all aspects of business.
• Promotes honest or ethical employee behavior.
• Commits to safe workplace ethics.
• Does not use misleading or deceptive advertising.
• Helps displaced workers with placement.
• Employs friendly, courteous, responsive personnel.
• Utilizes only biodegradable or recyclable materials.

17
Top 20 Activities/ Characteristics of a Socially
Responsible Company (2 of 2)
• Upholds stated policy banning discrimination.
• Utilizes “environmentally friendly” packaging.
• Protects employees against sexual harassment.
• Gives money toward charitable or educational causes.
• Recycles within company.
• Shows no past record of questionable activity.
• Responds quickly to customer problems.
• Maintains waste reduction program.
• Provides or pays portion of medical costs.
• Promotes energy conservation program.
• Tries continually to improve quality.

18
 Rise of the CSR Exemplar Firms

• Social entrepreneurship firms: Social enterprises that began their CSR

initiatives at their founding and strategically carried it forward.
• Social intrapreneurship firms: No specific social agenda as part of their initial
formation but later developed from within a highly visible social agenda or
program. Often begun by an individual within the firm.
• Mainstream adopters: other conventional businesses that have adopted,
practiced, and achieved some degree of distinction or recognition for socially
responsible policies and practices.

19
 Discussion Activity 2.1.4

Explain what makes a CSR exemplar firm. Distinguish among social

entrepreneurship, social intrapreneurship, and mainstream adopters.
What Makes a CSR Exemplar Firm:
Social Intrapreneurship Firms:
-Proactive commitment to CSR as a core business strategy. -No initial social agenda, but CSR developed internally over time.
-Strategically integrated CSR into company operations and decision-making. -Driven by employees or individuals within the firm.
-Innovative in creating new models for social, environmental, and ethical -CSR emerges organically from within the company.
impact. Example: Google (employees advocating for environmental
-Engagement with stakeholders through transparency, feedback, and sustainability).
accountability.
-Continuous improvement and measurable impact on society, environment, Mainstream Adopters:
and economy.
-CSR adopted later due to external pressures or recognition of
Types of CSR Firms: CSR value.
Social Entrepreneurship Firms: -CSR added after company is established and growing.
-Often motivated by market trends, consumer demands, or
-CSR initiated at founding. regulations.
-Mission-driven with social impact as the core goal. -Example: Nike (shift toward CSR after facing criticism)
-CSR embedded in the company’s DNA from the start.
-Example: TOMS Shoes (buy one, give one).
20
 Arguments Against CSR

• Classical Economics: The classical economic view is that business’s only goal
is the maximizing of profits for owners.
• Business Not Equipped: Business is not equipped to handle social activities.
• Dilutes Business Purpose: It dilutes the primary purpose of business.
• Too Much Power Already: Businesses have too much power already.
• Global Competitiveness: It limits the ability to compete in a global
marketplace.

21
 Arguments in Support of CSR

• Enlightened self-interest: Businesses must take actions to ensure long-term

viability.
• Warding off government regulations: This is one of the most practical
reasons.
• Resources Available: Business has the resources and expertise. Let it try.
• Pro-action is better than Reaction: Pro-action is also less costly.
• Public supports: the public strongly supports CSR.

22
The Business Case for Strategic Approach
CSR (Corporate Social
Responsibility)
The Business Case for CSR Integrates CSR into the
company's long-term strategy.
Defensive Approach Focuses on gaining
competitive advantage (e.g.,
Focus on protecting the entering sustainable markets).
company’s reputation.
Reactive approach to Example: Tesla focusing on
avoid criticism, scandals,
or regulatory penalties.
Defensive approach clean energy innovations to
align with sustainability goals
Example: A company and gain market leadership in
implementing stricter electric vehicles.
environmental policies
after being fined for Cost-benefit approach Innovation and Learning
pollution violations. Approach
Cost-Benefit Approach Uses CSR to drive innovation
and foster growth.
Evaluates the financial Strategic approach Encourages development of
returns of CSR activities. new ideas, products, and
Weighs the benefits (e.g., processes.
brand image, customer
trust) against the costs. Example: Unilever
Example: A retailer Innovation and learning approach developing water-efficient
investing in energy- hygiene products to address
efficient stores to reduce water scarcity in emerging
utility costs while markets while gaining
promoting sustainability. customer trust.
23
 Reasons and Benefits Supporting the
Business Case for CSR (1 of 2)
Six Business Reasons for Engaging in CSR
1. Customer engagement
2. Employee engagement
3. Brand differentiation
4. Long-term plans
5. Cutting costs
6. Innovation

24
 Reasons and Benefits Supporting the
Business Case for CSR (2 of 2)
Business Benefits of CSR 6. Differentiate itself from competitors
1. Win new business 7. Improve its business reputation and
2. Increase customer retention standing
3. Develop and enhance relationships 8. Provide access to investment and
with customers, suppliers, and funding opportunities
networks 9. Generate positive publicity and media
4. Attract, retain, and maintain a happy opportunities due to media interest in
workforce and be an Employer of ethical business activities
Choice
5. Save money on energy and operating
costs and manage risk

25
 CSR Greenwashing

• Some companies convey an image of responsibility when in fact they are

conducting business as usual.
• Companies attempt to make the public believe they are “green”—
environmentally friendly — when they are not.
• CSR Greenwashing is intentionally seeking to convey the image of a socially
responsible firm when the evidence of their practices does not support this
conclusion.

26
 Political CSR

• Gaining attention and application especially in European or similar contexts

where the government historically has assumed a larger role in providing
societal benefits.

• PCSR entails those responsible business activities that turn corporations into
political actors, by engaging in public deliberations, collective decisions, and the
provision of public goods or the restriction of public ill in cases where public
authorities are unable or unwilling to fulfill this role.

27
 Corporate Social Responsiveness,
Performance, and Impact
Corporate Social Responsiveness -
• An action-oriented variant of CSR.
Responsibility -
• Implies a state or condition of having assumed an obligation.
Responsiveness -
• Connotes a dynamic, action-oriented condition.

28
Carroll’s Corporate Social Performance
Model

29
 Discussion

• differentiate between corporate social responsibility and corporate social

responsiveness. Give an example of each. How does corporate social
performance relate to these terms? Where do corporate citizenship and
sustainability fit in?

CSR: Ethical commitment to societal well-being (e.g., donating to charities).

Responsiveness: Actions addressing societal needs (e.g., reducing plastics after criticism).
CSP: Measures the impact of CSR actions (e.g., tracking reduced emissions).
Corporate Citizenship: Acting as a responsible societal partner (e.g., community projects).
Sustainability: Ensures long-term environmental and social balance (e.g., using renewable energy).
Relation: CSR sets goals, responsiveness takes action, CSP measures results, while citizenship and
sustainability enhance responsibility and long-term focus.

30
 Corporate Citizenship (1 of 2)

Corporate citizenship -
• Embraces all the facets of corporate social responsibility, responsiveness, and
sustainability.
• Corporate citizenship is not a new concept, but one whose time has come.
• Corporate citizenship serves a variety of stakeholders.

31
 Corporate Citizenship (2 of 2)

Broad View
• A reflection of shared moral and ethical principles.
• A vehicle for integrating individuals into the communities in which they work.
• A form of enlightened self-interest that balances stakeholders’ claims and
enhances a company’s long-term value.
Narrow View
• Corporate community relations

32
Stages of Corporate Citizenship

33
 Global CSR and Corporate Citizenship

• …and Global CSR are topics in which there has been an explosion of interest.
• Multinational enterprises are expected to:
• be good corporate citizens in the countries in which they do business.
• tailor their initiatives to conform to the cultural environment.
• International academics and businesspeople around the world are now
researching and advocating CSR and corporate citizenship concepts.
• Convergence in global CSR approaches will continue as the world economic
stage becomes the common environment within which businesses function.

34
The Social and Financial Performance
Relationship

35
 One Bottom Line, or Many?

The stakeholder-bottom line perspective -

• Impacts or benefits of social performance cannot be fully measured or

appreciated by considering only the impact on the firm’s financial bottom line.
• CSP cannot be fully comprehended unless it includes impacts and measures on
consumers, employees, the community and other stakeholder groups.

36
 Creating Shared Value, Conscious
Capitalism, and Purpose-Driven Business
CSV (Creating Shared Value)
• Business and society could be brought back together if business redefined the
basic purpose as creating shared value—generating economic value in a way
that also produces value for society.

Conscious Capitalism
• A more complex form of capitalism that reflect and leverages the interdependent
nature of life and all of the stakeholders in business.
• Pillars include: Higher purpose, stakeholder orientation, conscious leadership,
conscious culture.

37
The CSR Evolutionary Trajectory

38
 Socially Responsible, Sustainable, ESG
Investing (1 of 2)
Socially Responsible Investing -
• Emerged in the 1970s.
• Nearly $7 trillion in socially responsible investments in the U.S.
Social Screening -
• A technique used to screen firms for socially-responsible investment purposes.
• Includes negative social screens and positive social screens.

39
 Socially Responsible, Sustainable, ESG
Investing (2 of 2)
• Total dollars invested in SRI has grown exponentially over past twenty years.
• Council on Economic Priorities suggests 3 reasons:
• More reliable research on CSP.
• Investment firms using social criteria have solid track record.
• The socially conscious 1960s generation is making investment decisions.

40