Corporate Social

Responsibility
An introduction to:
Objectives for this session:
At the end of this session, you should be able to
identify and describe:
A definition for CSR
Reasons for having a CSR programme
Objections to CSR
What makes a CSR programme
How a CSR programme is communicated
Principles of reporting for CSR
Some alternative viewpoints on CSR
Corporate Social
Responsibility?
What is:
Also known as:
Corporate Citizenship
Corporate Responsibility
Responsible Business
Definition:
Specifically, we see CSR as the voluntary
actions that business can take, over and
above compliance with minimum legal
requirements, to address both its own
competitive interests and the interests of
wider society.
Source: www.csr.gov.uk
Why CSR?
Consumers & investors: growing expectation for
organisations to behave responsibly
Consumer awareness: Green and Ethical
consumerism
Legislation: H&S, EPA, Sustainability, Codes of
Practice
Globalisation: Adoption of Best Practice,
Consumer & Legal Acceptance.
Business advantages of CSR:
Human Resources
Recruitment, retention and morale of Staff
Risk Management
Investment in ethical brand equity
Greenwash effect?
Brand Differentiation
As USP
Build brand loyalty
Reputation and brand attractiveness
Business advantages of CSR:
Business Development
New markets, products and services
Resources Management
Better management and conservation of strategic
assets
Stakeholder Management
Better internal and external relationships
Freedom of operation: reduce government, public,
NGO intervention in organisation
adds value
Corporate Social Responsibility:
Why not CSR?
May take management focus away from core
business activity
May appear cosmetic without genuine social
benefit
May make organisation more vulnerable to
revelation of bad / unethical business practice
A restriction to free trade?
Economist, Milton Friedman says:
The social responsibility of business is to
increase its profits.
What does it mean to say that "business"
has responsibilities? Only people can have
responsibilities.
in a free society there is one and only one social
responsibility of business to use its resources and engage in
activities designed to increase its profits so long as it stays
within the rules of the game, which is to say, engages in open
and free competition without deception or fraud."
Some of the most common ways in which
CSR is demonstrated:
Specialist adopted
projects
Corporate charitable
donations
Voluntary schemes for staff
Staff fundraising activities
Changes to organisational
operations
The Classical View
Managements only social responsibility is to maximize profits
(create a financial return) by operating the business in the best
interests of the stockholders (owners of the corporation).
Expending the firms resources on doing social good
unjustifiably increases costs that lower profits to the owners
and raises prices to consumers
The Socioeconomic View
Managements social responsibility goes beyond making
profits to include protecting and improving societys
welfare.
Corporations are not independent entities responsible
only to stockholders.
Firms have a moral responsibility to larger society to
become involved in social, legal, and political issues.
To do the right thing

Maximize
firms profits to
the exclusion
of all else
Balance profits
and social
objectives
Do what it
takes to
make a
profit; skirt
the law; fly
below
social
radar
Fight social
responsibility
initiatives
Comply;
do what
is
legally
required
Integrate
social
objectives
and business
goals
Lead the
industry
and other
businesse
s with best
practices
Do more than
required; e.g.
engage in
philanthropic
giving
Articulate
social value
objectives
Corporate Social Responsibility Continuum
Corporate Social Responsibility (CSR)
Business Criticism/ Social Response Cycle
Factors in the Societal Environment
Criticism of
Business
Increased concern
for the Social Environment
A Changed
Social Contract
Business Assumption of Corporate Social Responsibility
Social Responsiveness, Social Performance, Corporate Citizenship
A More Satisfied Society
Fewer Factors Leading
to Business Criticism
Increased Expectations Leading
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
Paternalism



Search the Web
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 1950s 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 companys 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)
Carrolls 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)
Carrolls Four Part Definition
Understanding the Four Components
Responsibility Societal
Expectation
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.
Discretionary
(Philanthropic)
Desired/
Expected
Be a good corporate citizen.
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

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
Socialand FinancialPerformance
Good Corporate
Social Performance
Perspective 1: CSP Drives the Relationship
Good Corporate
Financial
Performance
Good Corporate
Reputation
Good Corporate
Financial
Performance
Perspective 2: CFP Drives the Relationship
Good Corporate
Social
Performance
Good Corporate
Reputation
Good Corporate
Social Performance
Perspective 3: Interactive Relationship Among CSP, CFP, and CR
Good Corporate
Financial
Performance
Good Corporate
Reputation