Module-1 Name of Institution

INTRODUCTION TO
CORPORATE SOCIAL
RESPONSIBILITY
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DEFINATION OF CSR:

“A responsibility among firms to pursue

goals in addition to profit maximization and a
responsibility among a firm’s stakeholders to
hold the firm accountable for its actions.”
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Lesson One |

Archie B. Carroll, 1979

Introduction

“The social responsibility of business

encompasses the economic, legal,
ethical, and discretionary expectations
that society has of organizations at a given
point in time.”
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Main Concepts of CSR

• CSR (Carrol, 1979)

Firms have responsibilities to societies including economic, legal, ethical and
discretionary (or philanthropic).
- See also De George (1999) on the “Myth of the Amoral Firm”

• Social Contract (Donaldson, 1982; Donaldson and

Dunfee, 1999) – There is a tacit social contract
between the firm and society; the contract bestows
certain rights in exchange for certain responsibilities.
• Stakeholder Theory (Freeman, 1984) – A stakeholder is
“any group or individual who can affect or is affected by the
achievement of an organization's purpose.” Argues that it is
in the company’s strategic interest to respect the interests of
all its stakeholders.
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The Pyramid of CSR Lesson One |

Introduction

to benefit the firm & society

more proactive & strategic Discretionary

Responsibilities

to do no harm
Ethical to its
Responsibilities stakeholders/
environment

Legal to act within legal

Responsibilities framework

Economic to produce acceptable

Responsibilities returns on investments

Source: Archie B. Carroll, (1991) The Pyramid of Corporate Social Responsibility

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Lesson One |

In Summary: CSR is. . .

Introduction

• A dynamic, fluid concept

• An integral element of ethics
• Both a means and an end
– How a firm operates to gain societal legitimacy
– How well a firm has been able to navigate stakeholder concerns
while implementing its business model
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 To whom does business owe Name of Institution

this social responsibility?

• Firms exist in relationships with many
stakeholders and these relationships can
create a variety of responsibilities.
• It may not be possible to satisfy the needs
of each and every stakeholder in a
situation.
• Therefore, social responsibility would
require decisions to prioritize competing
and conflicting responsibilities.
 Prioritization of Stakeholders Name of Institution

• The prioritization of stakeholders is often

determined by a company’s mission,
practice, board or custom.
• All too often, however, the prioritization
is presumed rather than intentionally
discussed and challenged, which might
lead to entrenchment rather than
enhancement of the firm.
 The Nature and Extent of the Name of Institution

Responsibility
• Is profit, legally made, the only guiding principle of
socially responsible business activities, or should
the impact of a decision on others be considered,
even where the law does not require it?
• What do we mean when we say “responsible?”
– We might mean that it is reliable, dependable or
trustworthy.
– A second meaning of responsible involves attributing
something as a cause for some event or action.
– A third sense involves attributing liability or
accountability for some event or action and creates a
responsibility to make things right again.
The Nature of “Responsibility” Name of Institution

• Reference to corporate social responsibility denotes those duties

or restrictions that bind us to act in one way rather than another.
• Responsibilities are those things that we ought, or should, do, even
if we would rather not.
• Responsibilities bind, or compel, or constrain, or require us to act
in certain ways.
• To talk about business’s social responsibilities is to be concerned
with society’s interests that restrict or bind business’s behavior.

Social “responsibility” is what a business

should or ought to do for the sake of society.
 What should a business do? Name of Institution

• Business has the social responsibility to obey the law.

• Philosophers would contend that we have

responsibilities beyond the law and they distinguish
between different types of responsibilities, on a scale
from more to less demanding and binding.
– First, we have responsibilities not to cause harm to others.
– A second, perhaps less binding responsibility, is to prevent
harm even in those cases where one is not the cause.
– Finally, there might be responsibilities to do good.
– (See next slide)
Philosophical priorities in CSRName of Institution

• Do good
Maximize economic, social
and environmental value
• Do no harm
Even in those cases
where one is not the cause

• Do no harm
Avoid economic, environmental and social harm
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Implications for Enterprises

CSR Drivers
• New social and product liability
patterns

• Development of Codes of
Conduct and CSR reporting Transnational Corporations

• Expanding sphere of influence

– Application of Code of
Conduct to value chain
– CSR management: value
chain management =
compliance management The Extended Firm
Regional Plants / JV Partners
Suppliers / Distributors
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Implications for Enterprises:

TNC as an “organ of society”

“every individual and every It would be a strange tort system

organ of society [should] that imposed liability on state
promote respect for these actors but not on those who
rights and freedoms and to conspired with them to perpetrate
secure their universal and illegal acts through coercive use of
effective recognition.” - UN state power. - 1997 Eastman Kodack Co. v.
International Declaration of Human Rights Kalvin

Trend in international law

International International
principles principles
apply only to apply to
governments governments
and
companies
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Implications for Enterprises:

CSR Management

How do companies address socio-environmental &

legal compliance issues?
• Policies - Code of Conduct
• Systems - Compliance Management
• Reporting - Accounting and Reporting
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