CRITICISM

CRITICISM AND
AND
CONCERNS
CONCERNS O N
C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y

GROUP 5
 GROUP 5

OBJECTIVES
At the end of the lesson, you should be able
to:

1. To understand the criticisms in corporate

social responsibility;
2. To identify the concerns in corporate
social responsibility and;
3. To explain how CSR affect the nature of
business, motives, ethical ideologies,
misdirection, and controversial industries.
 GROUP 5

HOW CSR AFFECT THE

NATURE OF BUSINESS?
Milton Friedman and others argued that a
corporation's purpose is to maximize
returns to its shareholders and that
obeying the laws of the jurisdictions
within which it operates constitutes
socially responsible behavior.
 GROUP 5
Criticisms
Key Points
1. Narrow Focus
1. Shareholder Primacy 2. Stakeholder interests
2. Legal Compliance 3. Social and Environmental
3. No Social Mandate Externalities
Implications Alternative Perspective
1. CSR Reporting 1. Stakeholder Theory
2. ESG Investing 2. Triple Bottom Line
3. Regulatory Requirements 3. CSR as Strategic
Advantage
 GROUP 5 NIKE
Nike’s Community Development
NATURE OF BUSINESS Program in Indonesia - Improved
working conditions and community
investments
While some CSR supporters claim that
companies practicing CSR, especially in
developing countries, are less likely to
exploit workers and communities, critics
claim that CSR itself imposes outside
values on local communities with
unpredictable outcomes.
 GROUP 5 COCA COLA

Coca-Cola’s Water Conservation

NATURE OF BUSINESS Project in Africa - Water
management and conservation
initiatives
While some CSR supporters claim that
companies practicing CSR, especially in
developing countries, are less likely to
exploit workers and communities, critics
claim that CSR itself imposes outside
values on local communities with
unpredictable outcomes.
 GROUP 5

CSR IN DEVELOPING COUNTRIES

BENEFITS CHALLENGES
1. Improved Labor Standards 1. Weak Governance
2. Community Development 2. Limited Resources
3. Environmental Sustainability 3. Cultural and Linguistic Barrier
4. Increased Transparency 4. Power Imbalances

CRITICISMS
1. Cultural Imperialism
2. Unintended Consequences
3. Lack of Local Ownership
4. Greenwashing
5. Inequitable Benefit Distribution
 GROUP 5

NATURE OF BUSINESS
· Better governmental regulation and
enforcement, rather than voluntary measures, are
an alternative to CSR that moves decision-making
and resource allocation from public to private
bodies. However, critics claim that effective CSR
must be voluntary as mandatory social
responsibility programs regulated by the
government interferes with people's own plans
and preferences, distorts the allocation of
resources, and increases the likelihood of
irresponsible decisions.
 GROUP 5

Alternatives to CSR: Government Regulation

ADVANTAGES
1. Enforceability: Mandatory regulations ensure compliance.
2. Consistency: Uniform standards across industries.
3. Accountability: Clear lines of responsibility.
4. Public oversight: Transparency and scrutiny.

DISADVANTAGES
1. Inflexibility: One-size-fits-all approach.
2. Bureaucratic inefficiencies: Slow response to changing circumstances.
3. Regulatory capture: Industry influence on policymakers.
4. Economic burdens: Compliance costs for businesses.
 GROUP 5

Voluntary CSR
ADVANTAGES
1. Flexibility: Tailored initiatives responding to local needs.
2. Innovation: Encourages creative solutions.
3. Cost-effective: Reduced regulatory burdens.
4. Reputation enhancement: Brands benefit from proactive CSR.

DISADVANTAGES
1. Lack of accountability: No guaranteed compliance.
2. Inconsistency: Varied standards across industries.
3. Greenwashing: Misrepresenting environmental/social commitments.
4. Free-rider problem: Companies may exploit others' CSR efforts.
 GROUP 5

HYBRID APPROACH
1. Co-regulation: Collaborative government-
industry standards.
2. Self-regulation: Industry-led initiatives with
government oversight.
3. Certification programs: Independent
verification of CSR claims.
GROUP 5

MOTIVES
 GROUP 5

CORPORATE
SOCIAL
RESPONSIBILITY
—CSR means that companies take
responsibility for how their actions
affect society, the environment, and
the economy. It’s about more than
just making money—it’s about
contributing to the greater good.
 GROUP 5

HYPOCRISY AND
REPUTATIONAL
BENEFITS IN CSR
—These terms highlight how some
companies may use CSR more for
image rather than genuine care for
society.
 GROUP 5

AGENCY
PROBLEM
—The agency problem happens
when company managers make
decisions that benefit themselves
rather than the company or society.
 GROUP 5

LEGITIMIZING
POWER
—Legitimizing power means
companies use CSR to make
themselves look trustworthy and
responsible so people will accept
their influence and actions.
 GROUP 5

CORPORATE
CALCULUS
—business calculation that weighs
profits against the costs of being
socially responsible.
 GROUP 5

HALO EFFECT
—when a company's good actions,
like being charitable or eco-friendly,
make people view the whole
company more positively.
 GROUP 5

FINANCIAL
MOTIVES
—companies do CSR to make
money, but people often doubt it if
they feel the companies are just
doing it for their own gain.
 GROUP 5

GOVERNANCE
INITIATIVES
—is about making sure companies
act responsibly and are honest about
their social and environmental efforts.
It includes having rules and policies to
guide their actions and ensure they
are accountable to the community.
GROUP 5

ETHICAL
IDEOLOGIES
 GROUP 5

ETHICAL
IDEOLOGIES
CEOs’ political ideologies influence how they view
and use corporate social responsibility (CSR)

Liberal CEOs: envision the practice of CSR

as beneficial and desirable to increase a
firm's reputation.

Conservative CEOs: tend to support the

practice of CSR if they hold a view that it
will provide a good return to the financials
of the company.
 GROUP 5

EXAMPLE OF LIBERAL CEO:

COMPANY: Patagonia
CEO Approach
CSR Practice:
Reasoning
 GROUP 5

EXAMPLE OF CONSERVATIVE CEO:

COMPANY: ExxonMobil
CEO Approach
CSR Practice
Reasoning
GROUP 5

MISDIRECTION
MISDIRECTION
- Happens when companies use their socially
responsible initiatives as a distraction or cover for
harmful practices they are engaging in elsewhere.
- A form of manipulation, where companies may
emphasize positive actions like charitable
donations and environmental effots to create a
favorable public image. However, these efforts are
sometimes used to divert attention away from
unethical or harmful practices, such as
exploitation, pollution, or unfair labor conditions.
EXAMPLE COMPANIES:
1. Mc Donalds
Good Action:
Supports children’s charities like Ronald McDonald
House.
.
Hidden Reason:
Distracts people from the criticism that their food
contributes to obesity and health issues.
EXAMPLE COMPANIES:
2. RJ Reynolds Tobacco Company
Good Action:
Funds research on diseases like CJD (not related to
smoking).

Hidden Reason:
Draws attention away from smoking's proven link to
cancer.
EXAMPLE COMPANIES:
3. Heineken
Good Action:
Promotes campaigns like “When You Drive, Never Drink”
to encourage responsible drinking.

Hidden Reason:
Helps normalize alcohol consumption to prevent stricter
regulations on alcohol ads and sales.
GROUP 5

CONTROVERSIAL
INDUSTRIES
CONTROVERSIAL
INDUSTRIES
INDUSTRIES SUCH AS TOBACCO,
ALCOHOL OR MUNITIONS FIRMS MAKE
PRODUCTS THAT DAMAGE THEIR
CONSUMERS OR THE ENVIRONMENT.
SUCH FIRMS MAY ENGAGE IN THE
SAME PHILANTHROPIC ACTIVITIES AS
THOSE IN OTHER INDUSTRIES. THIS
DUALITY COMPLICATES ASSESSMENTS
OF SUCH FIRMS WITH RESPECT TO
CSR.
THE PHILIP MORRIS
PHILIPPINES
MANUFACTURING INC.
PMFTC INC. (PMFTC), THE PHILIPPINE
AFFILIATE OF PHILIP MORRIS
INTERNATIONAL (PMI), IS THE LEADING
CIGARETTE MANUFACTURER IN THE
PHILIPPINES. IT MANUFACTURES 5 OUT
OF THE TOP 10 BRANDS AVAILABLE IN
THE MARKET, LED BY MARLBORO, THE
WORLD’S NUMBER ONE CIGARETTE
BRAND, AND FORTUNE, THE BEST-
SELLING LOCAL BRAND IN THE
COUNTRY.
CSR PROGRAMS OF THE PHILIP
MORRIS PHILIPPINES
MANUFACTURING INC.
PMFTC COMMITS ITSELF TO GIVE BACK TO
COMMUNITIES. THE COMPANY'S
CORPORATE SOCIAL RESPONSIBILITY (CSR)
PROGRAM, CURRENTLY MOBILIZES 15
PROJECTS IN SUPPORT OF THE UNITED
NATIONS SUSTAINABLE DEVELOPMENT
GOALS. THESE PROJECTS ADDRESS
LIVELIHOOD, EDUCATION, ENVIRONMENT,
COMMUNITY HEALTH, POVERTY
ALLEVIATION, DISASTER PREPAREDNESS,
AND CALAMITY RELIEF ACROSS THE
COUNTRY. PMFTC DONATED PHP 100
MILLION FOR THIS OPERATIONS.
IMPACTS OF SMOKING CIGARETTES
Product Consumption Post-consumption waste
• The health impacts of environmental tobacco • Cigarette butts are the most
smoke exposure include lung cancer, commonly discarded piece of waste
cardiovascular disease and pulmonary disease. globally and are the most frequent
Exposure to residual chemicals in environments item of litter picked up on beaches
where smoking has taken place may also have
and water edges worldwide. The non-
human health impacts.
biodegradable cellulose acetate filter
• Most cigarettes are lit using matches or gas-
attached to most manufactured
filled lighters. If, for example, one wooden match
cigarettes is the main component of
is used to light two cigarettes, the six trillion
cigarettes smoked globally each year would cigarette butt waste and trillions of
require the destruction of about nine million trees filter- tipped butts are discarded
to produce three trillion matches. There are also annually.
environmental impacts of manufacturing and
disposing of the plastic, metal and butane used in
making cigarette lighters.
CSR PROGRAMS OF THE
PHILIP MORRIS PHILIPPINES
MANUFACTURING INC.

• IN A CONTINUOUS EFFORT TO
REDUCE CO2 EMISSIONS, PMFTC
DONATED USD 3.1 MILLION IN 2018 IN
A SOLAR POWER PLANT.
IMPACTS OF SMOKING CIGARETTES
Hazardous substances Carbon dioxide emissions
• Hazardous substances has been identified in • Tobacco smoking leads directly to
cigarette butts – including arsenic, lead, nicotine the emission of 2 600 000 tonnes of
and ethyl phenol. These substances are leached carbon dioxide and about 5 200 000
from discarded butts into aquatic environments tonnes of methane. Data from 66 low-
and soil. The large quantity of discarded butts
and middle- income countries showed
may allow leachates to affect the quality of
that tobacco growing and curing
drinking water. Other post- consumption wastes,
caused significant deforestation of
such as medicines, pesticides and plastic
forests.
microbeads from cosmetics, have been found in
drinking water sources. 15-17 It is possible that
tobacco product waste may also prove to be a
significant environmental contaminant and
potential human health hazard through
bioaccumulation in the food-chain.
GROUP 5

THANK YOU
Guess the Word
REBUS PUZZLE GAME
Use the pictures and
letters to guess the
word
START!
CRI
 Answer

CRITICISM
 Answer
GREENWASHING
IN
Answer

INDUSTRIES
E
Answer

ETHICAL
RAL
Answer

LIBERAL
Answer

MOTIVES
Answer
MISDIRECTION
e

ECT
Answer
HALO EFFECT
OF
e
 Answer
NATURE OF BUSINESS
A
Answer
COMPANIES