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Corporate Citizenship, Social Responsibility, Responsiveness, and Performance

Good governance CSR

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Janet T. Cometa
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43 views

Corporate Citizenship, Social Responsibility, Responsiveness, and Performance

Good governance CSR

Uploaded by

Janet T. Cometa
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Corporate Citizenship, Social

Responsibility, Responsiveness,
and Performance

Search the Web


One of the leading organizations promoting
corporate responsibility is Business for Social
Responsibility : www.bsr.org.

1
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

2
Corporate Social Responsibility (CSR)

Preliminary definitions of CSR


• The impact of a company’s 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
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
Corporate Social Responsibility (CSR)
Business Criticism/ Social Response Cycle

Factors in the Societal Environment

Criticism of
Business
Increased concern A Changed
for the Social Environment Social Contract

Business Assumption of Corporate Social Responsibility

Social Responsiveness, Social Performance, Corporate


Citizenship
A More Satisfied Society

Fewer Factors Leading Increased Expectations Leading


to Business Criticism to More Criticism

2-7
Corporate Social Responsibility (CSR)

Historical Perspective
• Economic model – the invisible hand of the
marketplace protected societal interest
• Legal model – laws protected societal interests
Corporate Social Responsibility (CSR)

Historical Perspective
• Modified the economic model
• Philanthropy
• Community obligations Search the Web
• Paternalism Milton Hershey was a leading example of an
individual who employed philanthropy,
community obligation and paternalism To learn
more about Milton Hershey and the company,
school and town he built, log on to:
http://www.miltonhershey.com/
Corporate Social Responsibility (CSR)

Historical Perspective
• What was the main motivation?
• To keep government at arms length

Search the Web


Businesses are interested in CSR and one leading business
organization that companies can join is Business for
Social Responsibility. To learn more about BSR, visit
their web site at:: http://www.bsr.org/
Corporate Social Responsibility (CSR)

Historical Perspective
From the 1950’s to the present the concept of CSR
has gained considerable acceptance and the
meaning has been broadened to include additional
components
Corporate Social Responsibility (CSR)

Evolving Viewpoints
• CSR considers the impact of the company’s actions
on society (Bauer)
• CSR requires decision makers to take actions that
protect and improve the welfare of society as a
whole along with their own interests (Davis and
Blomstrom)
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)
Corporate Social Responsibility (CSR)

Evolving Viewpoints
• CSR relates primarily to achieving outcomes from
organizational decisions concerning specific issues
or problems, which by some normative standard
have beneficial rather than adverse effects upon
pertinent corporate stakeholders. The normative
correctness of the products of corporate action
have been the main focus of CSR (Epstein)
Corporate Social Responsibility (CSR)

Carroll’s Four Part Definition


• CSR encompasses the economic, legal, ethical and
discretionary (philanthropic) expectations that
society has of organizations at a given point in time
Corporate Social Responsibility (CSR)
Carroll’s Four Part Definition
Understanding the Four Components

Responsibility Societal Examples


Expectation
Economic Required Be profitable. Maximize sales,
minimize costs, etc.
Legal Required Obey laws and regulations.
Ethical Expected Do what is right, fair and just.
Discretionary Desired/ Be a good corporate citizen.
(Philanthropic) Expected
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
Pyramid of CSR

Philanthropic Responsibilities
Be a good corporate citizen.

Ethical Responsibilities
Be ethical.

Legal Responsibilities
Obey the law.

Economic Responsibilities
Be profitable.
Corporate Social Responsibility (CSR)

CSR in Equation Form Is the Sum of:


Economic Responsibilities (Make a profit)
Legal Responsibilities (Obey the law)
Ethical Responsibilities (Be ethical)
Philanthropic Responsibilities (Good corporate citizen)
CSR
Corporate Social Responsibility (CSR)

Stakeholder View
Stakeholder Group Addressed and Affected
CSR Owners Con- Employees Community Others
Component sumers
Economic 1 4 2 3 5
Legal 3 2 1 4 5
Ethical 4 1 2 3 5
Philanthropic 3 4 2 1 5
Corporate Social Responsibility (CSR)
Arguments Against
• Restricts the free market goal of • Increase business power
profit maximization • Limits the ability to compete in
• Business is not equipped to a global marketplace
handle social activities
• Dilutes the primary aim of
business
Corporate Social Responsibility (CSR)
Arguments For
• Addresses social issues • Limits future government
business caused and intervention
allows business to be
part of the solution • Addresses issues by using
business resources and
• Protects business self- expertise
interest
• Addresses issues by being
proactive
Corporate Social Responsibility (CSR)
Business Responsibilities in the 21st Century

• Demonstrate a commitment to society’s values and


contribute to society’s 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.
Corporate Social Performance
Carroll’s CSP model integrates economic concerns into
a social performance framework
Corporate Social Performance

Extensions and Reformulations


• Wartick and Cochran’s extensions
• Wood’s reformulations
• Swanson’s Reorientation
Corporate Social Performance
Corporate Social Performance
Nonacademic Research
• Fortune's ranking of most and least admired corporations
• Council on Economic Priorities Corporate Conscience Awards
• Business Ethics Magazine Awards
• WalkerInformation’s Research on the impact of social responsibility
Corporate Citizenship

Corporate citizenship embraces all the facets of corporate social


responsibility, responsiveness and performance
Social—and Financial—Performance

Perspective 1: CSP Drives the Relationship

Good Corporate
Good Corporate Good Corporate
Financial
Social Performance Reputation
Performance

Perspective 2: CFP Drives the Relationship

Good Corporate Good Corporate


Good Corporate
Financial Social
Reputation
Performance Performance

Perspective 3: Interactive Relationship Among CSP, CFP, and CR

Good Corporate
Good Corporate Good Corporate
Financial
Social Performance Reputation
Performance
Social and Financial Performance
A Multiple Bottom-Line Perspective
Socially Conscious or Ethical Investing

Social screening is a technique used to


screen firms for investment purposes
Supplemental Videos

• https://www.youtube.com/watch?v=E0NkGtNU_9w
• https://www.youtube.com/watch?v=Z5KZhm19EO0
• https://www.youtube.com/watch?v=jga4s0Ei7Zs
• https://www.youtube.com/watch?v=N8dXNzCIVxg

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