Corporate Citizenship,
Social Responsibility,
Responsiveness,
and Performance
2-1
1
2-2
2-3
2-4
2-5
2-6
2-7
2-8
CSR PROGRAM
2-9
CSR PROGRAM
210
Objectives
Explain corporate social responsibility (CSR)
Provide business examples of CSR
Differentiate social responsibility and
responsiveness
Explain corporate social performance (CSP)
Relate social performance to financial
performance
Describe the socially conscious investing
movement
22
11
Outline
The CSR Concept
Arguments For
and Against
Corporate Social
Responsibility
Corporate Social
Responsiveness
Corporate Social
Performance (CSP)
Nonacademic
Research on CSP
Social Performance
and Financial
Performance
Socially Conscious
or Ethical
Investing
Summary
212
Introduction
The focus in this chapter is on
corporate social responsibility, which
involves responsibilities outside of
making a profit and the key questions
for corporations include:
Does business have a social responsibility?
If so, what is the extent and type of the
responsibility?
213
Corporate Social
Responsibility (CSR)
Preliminary definitions of CSR
The impact of a companys actions
on society
Requires a manager to consider his
acts in terms of a whole social
system, and holds him responsible for
the effects of his acts anywhere in that
system
214
Corporate Social
Responsibility (CSR)
Corporate Citizenship Concepts
Corporate social responsibility
emphasizes obligation and
accountability to society
Corporate social responsiveness
emphasizes action, activity
Corporate social performance
emphasizes outcomes, results
215
Corporate Social
Responsibility (CSR)
Historical Perspective
Economic model the invisible
hand of the marketplace protected
societal interest
Legal model laws protected
societal interests
216
Corporate Social
Responsibility (CSR)
Historical Perspective
Modified the economic model
Philanthropy (cinta sesama manusia)
Community obligations
Paternalism (bapakisme)
217
Corporate Social
Responsibility (CSR)
Historical Perspective
What was the main motivation?
To keep government at arms length
218
Corporate Social
Responsibility (CSR)
Evolving Viewpoints
CSR considers the impact of the
companys actions on society (Bauer)
CSR requires decision makers to take
actions that protect and improve the
welfare/kesejahteraan of society as a
whole along with their own interests
(Davis and Blomstrom)
219
Corporate Social
Responsibility (CSR)
Evolving Viewpoints
CSR mandates that the corporation has
not only economic and legal obligations,
but also certain responsibilities to
society that extend beyond these
obligations (McGuire)
220
Corporate Social
Responsibility (CSR)
Evolving /penyusunan Viewpoints
The normative correctness of the
products of corporate action have been
the main focus of CSR (Epstein)
221
Corporate Social
Responsibility (CSR)
Carrolls Four Part Definition
CSR encompasses the economic,
legal, ethical and discretionary
(philanthropic)/ kebijaksanaan
expectations that society has of
organizations at a given point in
time
222
Corporate Social
Responsibility (CSR)
Carrolls Four Part Definition
Understanding the Four Components
Responsibil Societal
ity
Expectati
on
Examples
Economic
Required
Be profitable.
Maximize sales,
minimize costs, etc.
Legal
Required
Obey laws and
regulations.
Ethical
Expected
Do what is right, fair
and just.
Discretiona Desired/
Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz
Copyright 2003 by South-Western, a division of Thomson Learning. All rights reserved
2-16
Be a good corporate
Pyramid of CSR
Philanthropic Responsibilities
Be a good corporate citizen.
Ethical Responsibilities
Be ethical.
Legal Responsibilities
Obey the law.
Economic Responsibilities
Be profitable.
224
Corporate Social
Responsibility (CSR)
CSR in Equation Form Is the
Sum of:
Economic Responsibilities (Make a profit)
Legal Responsibilities (Obey/patuh the law)
Ethical Responsibilities (Be ethical)
Philanthropic Responsibilities (Good
corporate citizen)
CSR
225
Corporate Social
Responsibility (CSR)
Arguments Against
Restricts the free
market goal of
profit maximization
Business is not
equipped to
handle social
activities
Dilutes the primary
aim of business
Increase
business power
Limits the
ability to
compete in a
global
marketplace
226
Corporate Social
Responsibility (CSR)
Arguments For
Addresses social
issues business
caused and
allows business
to be part of the
solution
Protects business
self-interest
Limits future
government
intervention
Addresses issues by
using business
resources and
expertise
Addresses issues by
being proactive
227
Corporate Social Responsibility
(CSR)
Business Responsibilities in the
st
21
Century
Demonstrate a
commitment
to societys values
and contribute to societys social,
environmental, and economic goals
through action.
Insulate society from the negative
impacts of company operations, products
and services.
Share benefits of company activities with
key stakeholders as well as with shareholders.
Demonstrate that the company can make
more money by doing the right thing.
228
Corporate Citizenship
Corporate citizenship
embraces/merangkul all the
facets/segi-segi of corporate social
responsibility, responsiveness and
performance
229
Socialand Financial
Performance
Perspective 1: CSP Drives the Relationship
Good Corporate
Social Performance
Good Corporate
Financial
Performance
Good Corporate
Reputation
Perspective 2: CFP Drives the Relationship
Good Corporate
Financial
Performance
Good Corporate
Social
Performance
Good Corporate
Reputation
Perspective 3: Interactive Relationship Among CSP, CFP, and CR
Good Corporate
Social Performance
Good Corporate
Financial
Performance
Good Corporate
Reputation
230
Social and Financial
Performance
A Multiple Bottom-Line
Perspective
231
Socially
Conscious/kesadaran or
Ethical Investing
Social screening is a
technique used to screen firms
for investment purposes
232
Selected Key Terms
Business for Social
Responsibility
Community obligations
Corporate Citizenship
Corporate social
responsibility
Corporate social
responsiveness
Corporate social
performance
Economic, legal,
ethical and
discretionary
responsibilities
Paternalism
Philanthropy
Pyramid of CSR
Socially conscious
investing
233
